George Davies to stay on
The recovery at Marks & Spencer continued this morning, with the company announcing increased profits and a big improvement in sales.

In the 26 weeks to October 1, pre-tax profits rose 19.6 per cent to£308.2 million. The sales figures showed a dramatic improvement in the second quarter compared with the first, with like-fo-like sales up 1.3 per cent, having been down 5.4 per cent in the first quarter.

The improvement was marked particularly in general merchandise, where a sales fall of 11.2 per cent in the first quarter was reduced to a decrease of just 0.2 per cent in the second quarter.

Further good news for the company is that George Davies, founder of the Per Una brand, has been persuaded to stay on at M&S, running Per Una until the end of June next year. From July, he will become chairman of Per Una, working two days a week on the brand.

The company said that being more competitive in womenswear drove the improved performance of the clothing arm, while a strong performance in furniture drove a big improvement in sales of homewares.

M&S confirmed plans to roll out its store modernisation programme, following successful trials this year, with group capital expenditure in 2006/2007 likely to be between£450 million and£500 million.

The retailer took the opportunity to beef up its board this morning. Marketing director Steven Sharp is promoted to the board, with responsibility for marketing, e-commerce, store design and development. Two non-executive directors - Lady Patten and Jeremy Darroch - will join the board in February.

Despite the good performance, chairman Paul Myners said Christmas trading would still be challenging. 'When we updated the market on October 11, 2005, we said the trading environment remained very difficult,' he said. 'This view has not changed.'