Marks & Spencer (M&S) has come under fire from a top City analyst who said the upmarket retailer has made “no financial progress” under its current failing management team.
In a scathing 100-page research note entitled Do The Right Thing, Tony Shiret of Credit Suisse criticised the company’s strategy and the leadership of Sir Stuart Rose, under whom Shiret doubts M&S can be successful as profit forecasts fall.
Despite reports last year that M&S had made profits of £1 billion for the first time since 1998, analysts remain sceptical over the company’s future and the success of Rose’s five-year tenure.
Shiret predicted profits this year will be £560 million, falling to £328m in 2010, with dividends hard to sustain.
The research note stated: "We have studied M&S's operating and financial performance over the tenure of the current management. We conclude that even before the current rapid deterioration of profitability the company had made no financial progress outside of the £320m of largely supplier-funded cost savings initiated in 2004 and around £150m resulting from changes in accounting assumptions.
"Of greater concern has been the failure to address and reverse the company's drift towards a much older customer base... No business can have a long-term future with this type of demographic profile in our view," said Shiret.
M&S declined freshinfo’s offer to comment.
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