M&S to slash marketing spend as profits dive

LONDON - Marks & Spencer is to slash its £144m marketing spend by 20% over the next year, a move that may see it drop high-profile models including Twiggy and Erin O'Connor from its advertising.

The revelation that the celebrated campaign and its models could go, reported today in the Daily Telegraph, comes as the chain's high-street stores felt the full force of the credit crunch in the six months to 27 September, with profits down a massive 44% to £307.8m.

According to the Telegraph, M&S's executive director of marketing, Steven Sharp, did not yet know whether the cut in marketing budget would see the models dropped. "We have a lot of options," he said.

Overall sales over the six-month period rose by 0.8% to £4.2bn; with international sales up 23.9%. However, like-for-like sales were down 5.7% and general merchandise and food sales were down 6.2% and 5.3% respectively.

Stuart Rose, M&S's chief executive, said: "The economic environment has changed dramatically and we are now facing the most difficult retail conditions since the early 90s.

"We remain confident in our long-term growth prospects: to drive our brand in the UK and improve the quality of our trading space; to grow M&S Direct; and to develop our international business. We must also respond to the current climate and changing needs of our customers."

It was a different story for budget retailer Primark, which reported a profit hike of 17% to £233m.

M&S's Christmas advertising campaign kicks off this week featuring, amongst others, Twiggy and O'Connor, while actor Robson Green is providing the voiceover for a series of food ads.