The ratings on U.K.-based Marks&Spencer PLC (M&S) are supported by the group's leading position in the U.K. apparel-retail market and its strong presence at the upper-end of the U.K. food-retail market, but are constrained by the intense competition prevalent in the U.K.'s fragmented apparel retail market, especially in the middle-market segment in which M&S operates. In addition to seasonality, the industry also faces the risks of changes in fashion trends, which exposes the group to volatility in sales and operating earnings. Other inherent risks such as the discretionary nature of apparel purchases and the potential for unsuccessful product ranges are reflected in the group's satisfactory business risk profile. Nevertheless, these negative factors are cushioned by revenues generated from
