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City questions Rose's future as M&S shares plummet

Marks & Spencer shares dropped 25% as City analysts slash forecasts following yesterday's profit warning.

Analysts have cut around £200m off pre-tax profits forecasts after yesterday's surprise announcement of a 5.3% drop in like-for-like sales at M&S.

Nick Bubb at Pali International cut its target from 275p to 220p per share.

In a note issued this morning he said that there "is probably a 40% chance that in due course he will be forced to step down or resign".

He added: "That will leave M&S in even more of a mess than it is currently, given the lack of an obvious successor and even if Stuart Rose clings on to power, his authority will be much weakened."

Other analysts rounded on the retailer following the profit warning. Investec cut its profits forecast by 17% to £738m in light of a "seemingly relentless flow of negative sentiment towards the sector".

Tony Shiret at Investec said: "Regrettably we feel that the credibility of senior management has been irreparably damaged by both the degree of profit erosion in what was meant to be a relatively defensive company since Christmas, and the lack of any clear idea from management that they have a grip of problems in either part of the business."

M&S chief executive Stuart Rose said that the company was "a strong business in a weak market".

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