Marks & Spencer considered splitting food and fashion arms

The retailer’s chiefs thought a split was feasible, according to The Sunday Times, but that a standalone clothing arm would not attract investors.

Marks & Spencer chief executive Steve Rowe pondered the possible demerger after taking up the role in 2016.

Marks & Spencer’s food business has generally performed well in recent years, although it has come under pressure more recently. The performance of fashion has been a long-running problem.

Marks & Spencer posts interim results later this week. House broker Shore Capital expects the retailer to report total sales at its clothing and home arm to be down 2.7% over the first half, partly affected by store closures.

Shore said in a note late last month: “The constrained performance is expected by us to reflect a combination of the challenging consumer environment, the timing of Sales and a revenue pinch from more challenging end-of-period comparatives, among other factors.”

Marks & Spencer clothing chief Jill McDonald is under growing pressure to stabilise performance after a difficult start to the winter season, the Mail on Sunday reported.

Sources told the paper that cost-cutting targets had led to fashion stock being cut back too much, putting a lid on sales of ranges that had been popular with customers.

Shore expects M&S’ ‘clean’ pre-tax profits to be down 3.4% to £212m.

The broker said: “With the group still working through step one, ‘restoring the basics’, of a multi-year restructuring/transformation programme, one that will touch all areas of the business, it should not be a surprise that we anticipate a relatively subdued overall financial performance year on year.”