Sir Stuart Rose, the chief executive of Marks & Spencer, has splashed out £1 million on shares in the company signalling he is confident the business is well placed to trade through the economic crisis in 2008.
This morning, M&S disappointed the City when it said that like-for-like sales had fallen back 2.2% for the 13 weeks to December 29, reflecting the slowdown in consumer spending in the run up to Christmas. The share price plummeted 93.5p to 410p today on the back of the statement.
Rose's share purchase was supported by chairman Lord Burns, director of food Steven Esom and director of international operations Carl Leaver who also invested in shares this afternoon, reiterating their confidence in the business. Burns and Esom spent £100,000 each, while Leaver invested £74,000.
General merchandise was the worst performing category over Christmas. Its like-for-like sales, which include the retailer's fashion figures as well as its homeware, fell by 3.2% over the period, reflecting just how tough Christmas was for fashion retailers.
Total group sales were ahead 2.8% for the period, with UK sales up 2% but total general merchandise sales fell by 0.7%.
Numis estimated that clothing like-for-likes had fallen 3.7% over the period and said it would cut profit forecasts to around £1.025 billion against a previous estimate of £1.095bn.
Rose said: "Market conditions became more challenging through November and December. We continued to drive footfall, and volume growth in general merchandise was strong at 5%. Price deflation was 6% reflecting our continued focus on offering customers better values. We held market share in general merchandise at 10.6% and in food at 4.3%."
Rose added that M&S had seen a strong start to the Christmas Sale and that stocks had been cleared but he warned that trading conditions would "remain tough throughout 2008."
However he added that M&S was well placed to trade through the difficult economic climate. He said: "We are well positioned with a strong product offer and better than ever values across our business. We now have 70% of our stores in the modernised format and a strong pipeline of new space for 2008 and beyond. Direct and international continue to make good progress."
Web sales rocketed by 78% over the 13 weeks while international also performed strongly, with sales up 15.1%.