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Marks & Spencer Cut Dividends

Monday 11th of May 2009 03:20:42 AM

Marks and Spencer cut its dividend after profits declined due to the recession. The company is 125 years old and has experienced a decline in like-for-like sales in the United Kingdom. Sales have fallen by 5.9 percent over the year. This includes falling sales in all merchandise including clothes like sweatshirts and cheap t-shirts.

The dividend payout has been cut to 15p per share. It was previously 22.5p per share. Interestingly, sales rose but profits fell. Last January the firm had to reduce its payroll by 1,200 jobs. It also closed 27 stores.

The head of UK equities at Hargreaves Lansdown is Richard Hunter. He said, "The continuing retrenchment of the consumer towards cheaper products and the increasing agility of the competition are playing away from Marks and Spencer. Whilst our profit was down on the previous year, we took decisive action to respond to the changing needs of our customers and to mitigate the impact of the economic downturn."

Marks and Spencer's profits fell to £706 million. The chairman of the company, Stuart Rose, said, "We remain cautious about the outlook for the remainder of the year."

Marks and Spencer has opened stores around the world including China, Europe, India and the Middle East. There are plans to open additional ones depending on the state of the global recession.

(c) Image by Young Tran, www.sxc.hu/

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