Marks & Spencer Drops as House Broker Cuts Rating

Marks & Spencer Group Plc, the U.K. clothing retailer that this week reported its steepest sales decline since 2005, fell for a seventh day in London after joint house-broker Citigroup Inc. cut the stock to ``sell'' from ``buy@, reported The Bloomberg

The brokerage also reduced its 2009 and 2010 pretax profit estimates by 17 percent and 29 percent respectively, and slashed its price estimate on Britain's biggest clothing seller by 54 percent to 205 pence, it said today in a research note.

``The current sharply deteriorating U.K. macro environment should drive a `sell' stance on the U.K. general retailers,'' Citigroup analyst Richard Edwards wrote in the note. Goldman, Sachs & Co. and Investec Securities were among brokerages that lowered their ratings on Marks yesterday.

Marks fell 9 pence, or 3.8 percent, to 227 pence in London, the lowest price since March 21, 2001.

The stock slid 25 percent on July 2, the most since Bloomberg records began in 1988, after London-based Marks said sales at U.K. outlets open at least a year slid 5.3 percent in the 13 weeks ended June 28. The retailer also ousted its top food executive after his unit had the worst quarter in at least a decade.

The company, which gets almost half its revenue from food, faces increased competition on price from Tesco Plc, Wal-Mart Stores Inc's Asda and J Sainsbury Plc as customers rein in spending to cope with higher household bills. Food sales at stores open at least a year fell 4.5 percent in the first quarter ended June 28, the most since at least 1998, Marks said July 2.