Marks & Spencer calls off Kings sale again

Marks & Spencer said today talks to sell Kings Super Markets had ended.

Marks & Spencer said today talks to sell Kings Super Markets had ended.

M&S blamed tough US debt and equity markets, which made it difficult for potential buyers to raise sufficient cash for the upmarket grocery chain that M&S failed to sell to New York food retailer D'Agostino for $160 million in December.

M&S agreed an initial deal in July 2002 to sell Kings to privately owned D'Agostino after looking for a buyer for more than a year, but the sale fell through in December after the US group failed to get financial backing.

Analysts said the difficulty of getting a buyer was not surprising given the state of the US market and said the disposal was so small as to be insignificant.

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The sale of the unit, bought by M&S for $110.3 million in 1988, would have marked the end of a massive restructuring programme that began in March 2001 in which M&S shed loss-making continental European stores and announced its decision to pull out of the United States.

It is the firm's last remaining interest in the United States, having sold its US menswear chain Brooks Brothers in November 2001 for $225 million cash, less than a third it paid for the business in 1988.