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valued at $ 11bn (pounds 7.7bn) on the US stock market. The group is believed to have expressed its interest to Morgan Stanley, M&S's adviser that is handling the sale...

The Textile industry in the United States has been hammered as cotton prices fell to record lows. Companies that bought cotton at the lower price placed competitive pressure on those that bought at higher levels, which then boosted volume to offset declining margins, creating an oversupply for all. High energy prices have also hurt, making producing synthetics material more costly. As garment makers have come to outsource almost entirely to manufacturers overseas, where labor costs are lower, the few remaining U.S. fabric makers have had to aggressively curtail production and close factories. Earlier this month, Chemical Company DuPont Co. cut 4,000 jobs in response to weak U.S. apparel and textile markets. Russell Corporation is also about to cut about 800 jobs this quarter in their plant in Alabama. (AP- 6/6)

Consumer spending makes up roughly two thirds of economic activity. With recent hot economy, U.S. shoppers were effectively on a two-year spending spree, upgrading everything from their wardrobes to automobiles and homes. That former trend is now making it tough for retailers to live up to tough year-ago comparisons. March historically has been one of the least important months in the retail year, but weak sales this spring suggest stores will need to mark merchandise down further, hurting profits even more. The first quarter results also point to a troubling consumer spending trend.

James Zimmerman, chairman of Federated Department Stores, which reported much weaker than expected sales for March had said (AP- 4/12), " Weather was a factor in many parts of the country, but we think deteriorating consumer confidence in the wake of current economic uncertainty is having a significant impact on our sales." The latest economic data supported this theory. The Commerce Department reported on Thursday, April 12 ' that retail sales edged down 0.2 percent in March, a weaker showing than analysts expected. So what's the bottom line here? Is it boring fashion or slowing economy or unseasonably cool weather? You decide. The official story is still the weather.

Rainy and cold weather in the U.S. Midwest and Northeast hindered purchases of summer clothing in May, while the sluggish U.S. economy and high fuel costs cut into traffic at stores and malls, resulting in weak U.S. retail sales for the month. The anemic results prompted many big retail names like Gap Inc. and Federated Department Stores Inc. to warn on sales or earnings and dashed hopes that the pickup in same-store sales in April signaled a broader recovery for the industry. Discount stores continue to do better than department stores and some specialty chains as consumers pinch pennies and buy products that they need, such as food and household cleaners, while forgoing items like new sweaters. ``The sales, as expected, look disappointing,'' said Mark Picard, retail analyst at Lazard LLC. ``It's the economy, weather and the product cycle. If people don't need it, they aren't buying it, as evidenced by the health of Costco and Wal-Mart." Given May performance, the retailer expects the decline in second-quarter same-store sales to be worse than the mid-single-digit forecast previously given. (Reuters - 6/7) ``It was slaughter on retail avenue,'' Kurt Barnard, publisher of the Barnard Retail Trend Report, based in Upper Montclair, N.J.

``It's disappointing across the board,'' said Michael P. Niemira, vice president of the Bank of Tokyo-Mitsubishi Ltd., which estimated that retail sales are up only 1.6 percent for the month, based on preliminary results of the 78 out of the 80 retailers he tracks. Niemira had originally projected a 3 percent same-store increase, but revised the figure to 2 percent in the middle of the month.

Many retailers are pinning their hopes on the $45 billion or so in tax cuts and subsequent taxpayer rebates that are expected to kick in over the next few months, as well as five interest rate cuts by the Federal Reserve, which retailers hope will give a lift to the struggling economy by year-end. However, Niemira is uncertain how the consumer will view the tax cuts.

``It is not clear cut whether the consumer will view this as permanent income, as President Bush tried to make it, or if it is viewed as transitory income,'' he said. ``If it is viewed as transitory, only one-third will be spent, as a typical rule.'' May, viewed as a transition period, is the fifth most important month of the year in a retailer's sale calendar, representing 8 percent of total sales. June's results will offer a better indication of summer selling, Niemira said.

Niemira is currently projecting no growth in retail sales for the second half. He and other analysts noted that while consumers are still buying, they are moving to lower-priced goods. (AP- 6/7)

Selected figures on May's sales at leading retailers:

Abercrombie & Fitch: same-store sales down 2 percent; total sales up 25 percent.
Ann Taylor: same-store sales down 9.6 percent; total sales up 4.1 percent.
Dillard: same-store sales down 5 percent; total sales down 4 percent.
Federated Department Stores: same-store sales down 3.3 percent; total sales down 7.1 percent.
Gap: same-store sales down 10 percent; total sales rose 1 percent.
J.C. Penney Co. Inc.: same department-store sales down 1.2 percent; total department stores down 4.5 percent.
Kmart: same-store sales down 1 percent; total sales down 2.3 percent.
Kohl's: same-store sales up 2.1 percent; total sales up 17.6 percent.
May Department Stores Co. same-store sales up 1.1 percent; total sales up 5.8 percent.
Sears, Roebuck and Co. (same-store sales down 3.3 percent; total store sales down 2.8 percent
Target Corp.: same-store sales up 1.5 percent; total sales up 7.5 percent.
Wal-Mart Stores: same-stores sales up 3.8 percent; total sales rose 12.5 percent.