Horror on the high street as M&S faces 60% slump
THE devastating blow to retailers from mass store closures has been laid bare in a report by Goldman Sachs predicting a huge sales slump at Marks & Spencer.
Analysts at the Wall Street giant have slashed sales forecasts for M&S’s clothing division, pencilling in a slide of 60 per cent in the three months to the end of June on the same period last year.
The bank expects clothing sales across Europe to fall by 30 per cent in the first half of this year, assuming a 90 per cent drop in sales for a four- week closure period across March and April.
Credit rating agency Standard & Poor’s has also cut its assessment of M& S’s long- term debt from BBB, the lowest level of ‘investment grade’ borrowing, to BB+, typically called ‘junk’ debt.
Concerns are ri sing among retail executives that billions of pounds of clothing sitting in shops or warehouses is unlikely to be shifted before late April at the earliest. One clothing boss at a household name retailer said: ‘This is a disaster that will have l ong- t erm r epercussions f or businesses and the high street.’
He said he did not know when his shops would reopen, but when they did there would be a fire sale of stock ‘ the likes of which you have never seen’.
Investors and City forecasters have struggled to keep pace with the closures and, most recently, the decision by a growing number of clothing retailers t o close online delivery warehouses.
Next closed its online operation on Thursday evening after criticism from MPs over whether staff were able to follow social distancing rules.