S&P cuts Marks & Spencer

Standard & Poor's said it lowered the long-term corporate credit rating on Marks & Spencer plc to BBB- from BBB due to the company's ongoing operating underperformance. The A-3 short-term corporate credit rating was affirmed.

The outlook is stable.

"The downgrade reflects the deterioration in M&S' trading performance and profitability, which in combination with the ongoing low consumer confidence linked to the general economic slowdown will lead to debt protection measures declining to levels no longer compatible with the BBB rating category," S&P analyst Marketa Horkova said in a statement.

Ratings are supported by its position as the U.K.'s largest clothing retailer as well as its established presence in the U.K. food retail market, the agency said.

In addition, the M&S brand benefits from an image as a quasi-national institution with an emphasis on high quality and product innovation, the agency added.

These strengths are partially offset by the intense price competition prevalent in the U.K.'s fragmented apparel retail market, S&P noted.

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