THE fortunes of faltering high street chain Marks & Spencer were laid bare last night as it revealed a 19 per cent fall in annual profits.

M&S said profits dropped to £618.5m during a turbulent year that saw a complete overhaul of management and a takeover approach from retail tycoon Philip Green.

The figures were in line with City hopes and were delivered with a warning from M&S that tough economic conditions and intensifying high street competition meant its outlook remained challenging.

The company flagged up the slump earlier this year, after it was hit by weak trading conditions and heavy price-cutting aimed at clearing surplus stock.

M&S blamed the slump in profits on having to slash prices to shift excess stock, and the retailer said £1.3bn of old products and commitments had now been cleared.

Chief executive Stuart Rose, who was parachuted into the top job at M&S in May last year after Mr Green revealed his bid interest, said a 3.1 per cent drop in clothing sales was disappointing because more shoppers had visited the stores.