– Neil Collins is a Reuters columnist. The views expressed are his own –

If a company’s health can be judged by the clarity of the statements it makes, Marks & Spencer is sick indeed. Its long, comprehensive and in parts incomprehensible statement with Tuesday’s figures is stuffed with jargon, phrases designed to cheer up the troops, while some key news is glossed over.

The dividend is not cut, but merely “rebased”, to provide “a stronger foundation for moving forward”. The group is “the only retailer not benefitting from food inflation”, which is one way of explaining away a margin squeeze.

The unexpected departure of Carl Leaver, considered one of M&S’s rising stars, is because “reverting to the key role of driving international does not fit his career aspirations.”

Ian Dyson, finance director and chief executive-presumptive, is invited to head a “change programme” under the banner “2020 - Doing the Right Thing”. If he doesn’t do the right things, he’ll be gone long before 2020.

An unspoken theme runs through the statement; all this frenetic activity conceals the lurking suspicion that Stuart Rose, now chairman as well as chief executive, doesn’t really know how to restore this company to its pre-eminent position in the hearts and purses of Britain’s shoppers.

We’re promised more M&S white goods, M&S Energy, M&S Direct, and a “re-invigorated brand communication”.

At the same time there will be expansion in China, India and Europe. It’s a lot to ask of the management of any business, let alone one which has lost ground and faces such formidable competitors.

Retailing is about making the customer feel good, and if the executives can convey an upbeat impression, perhaps it will filter through to the shop floor. Still, a little more contrition for the brutal 33 percent “rebasing” of the dividend (after raising it by 23 percent last year) might have lightened the gloom for the shareholders.

– Neil Collins is a Reuters columnist. The opinions expressed are his own –

What is DSG International, the UK retailer business that was formerly known as Dixons, for?

The Dixons name has long since evaporated from Britain’s high streets into the electronic ether, leaving behind its fellow electricals businesses, Currys and PC World.

As Dixons dematerialized, the DSGI <DSGI.L> bosses turned Currys into CurrysDigital, as if a fashionable-sounding fascia could make buying dishwashers sexy.

Dixons was built on our appetite for the ever-evolving boys’ toys, from colour televisions and video recorders, to video cameras and DVD players. The business case, of a continuous stream of new products at ever-decreasing prices, allowed expansion into continental Europe and the U.S.

Yet Dixons demonstrated that he who lives by technology often dies by it. When the internet became the next big thing in consumer electronics, it also destroyed the company’s pricing power. Its customers visited the shops, decided what to buy, and then went onto the internet to get it more cheaply.

The shares slumped from over 200 pence in late 2006 to 9 pence last December, as debt taken on in the good times threatened to overwhelm the company. Last month the management fought back, when chief executive John Browett invited analysts and investors to its Birmingham mega-store to hear about the “renewal and transformation” plan.

It’s worked well enough for the shares to recover from December’s panic, and any day now Browett will invite the shareholders to back a hefty rights issue.

The relief rally took the shares up a further 10 percent on Wednesday, and at 37 pence the business is valued at 650 million pounds, providing enough headroom for the 300 million pounds the company believes it needs.

Browett’s softening-up tactics, and the feeling that life on the high street is not quite as dire as many expected, should get his issue away. Whether or not he can really make money from internet shopping, or succeed in making washing machines sexy, is a much harder question to answer.

Eric Auchard is a Reuters columnists. The opinions expressed in this column are his own.

For years, Web retailers have touted their convenience and efficency over conventional retailers, and enjoyed surging double-digit sales growth, especially in the crucial year-end holiday shopping season.    But the steady draining of consumer confidence reflected in recent government data and the latest market research reports suggest the online retail industry is bracing for a humbling first-ever year of flat or even contracting holiday sales.

Ecommerce, for reasons tied to both the global economic crash and Web-specific factors, is poised to fall harder than the much maligned retail store industry, itself struggling with recent high-profile bankruptcies and widespread signs that consumers are looking to sharply curtail their spending.

“Retail spending has not really dropped,” says Gian Fulgoni, chairman of consumer audience measurement firm comScore Inc. “It’s ecommerce growth rates that have fallen off a cliff.”

This week, comScore once again cut its forecast for U.S. holiday shopping, reporting that sales in the first 23 days of November had fallen to $8.2 billion, down 4 percent from a year earlier.

Forecasts for online holiday shopping issued in October or early November took the “glass half full” view of the coming shopping season — predicting low double-digit growth. That would be below prior years, but healthy versus overall retail.

The declining outlook comes after third-quarter U.S. Department of Commerce data showed dismal October growth online. Forecasters who had clung to the notion that online retailers would prove an exception, have changed their tune recently.

Nonetheless, the consumer tracking firm predicted online holiday sales for November and December could end flat at around $29.2 billion, in terms of year-over-year growth, but only if there is no further decline in the economy in coming weeks.  Until recently, comScore had forecast 6 percent growth in U.S. holiday sales, Fulgoni said. Similarly this week, eMarketer cut its 2008 ecommerce forecast to 4 percent from 10.1 percent.

Flat growth this season would compare with a 19 percent rise in 2007 sales, 24 percent in 2006 and 26 percent in 2005.  Overall, the National Retail Federation forecasts total U.S. holiday sales to grow a tepid, but positive, 2.2 percent to $470 billion. The includes both classic stores and Web storefronts.  In statistical terms, online retailers just had farther to fall than their distressed store-based rivals.

Similarly, in Britain, the exception that once applied to ecommerce is losing steam fast. Visits to UK shopping sites this month have declined by 14 percent as of Nov. 24, according to data from online market research firm Hitwise. Declining traffic has come despite heavy Web discounting activity at big retailers such as HMV, Waterstones and Tesco.

The gloomy forecasts come out just ahead of Cyber Monday, next week’s symbolic start to the U.S. online holiday shopping season.  Retail industry promoters of the Cyber Monday concept will tell you this coming Monday is a crucial test of the American consumer’s waning appetite to spend at the holidays. Don’t believe it.

If anything, Cyber Monday is one of the worst days from which to extrapolate year-end holiday sales trends. Rather it’s a day of special, one-off promotional discounts designed to remind consumers they can shop online instead of in stores. A survey by Shopzilla found 84 percent of retailers will have some sort of Cyber Monday promotion this year, up from 72 percent a year ago, with the biggest come-on in the form of discounts.

Despite the media hype that surrounds the occasion, Cyber Monday ranked just ninth among heaviest shopping days in 2007 and is not expected to behave much differently this time around.
ComScore says online shopping has a few remaining bright spots, in categories like video games, sports and fitness products and furniture and appliances.

But apparel is off and “consumer electronics seems to have lost its luster,” Fulgoni said of falling demand for products like big-screen TVs among online buyers.
“When all is said and done, ecommerce is where disposable income is spent,” says Fulgoni, comScore’s co-founder. “Everything has absolutely fallen apart in October and November.”

Some facets of the online industry may be better positioned than others, but none are immune: Not pure ecommerce players such as Amazon.com or eBay Inc, not gift card purveyors, nor multichannel marketers that operate both stores and a Web site.

Major ecommerce companies derive a disproportionate share of their revenue from fourth-quarter sales. Susquehanna Financial analyst Marianne Wolk estimates companies such as Amazon.com Inc <AMZN.O> or Overstock.com Inc <OSTK.O> derive just over one-third of their sales in the final quarter of the year.
GSI Commerce <GSIC.O>, which delivers ecommerce services to retailers who lack their own Web presence, generates nearly 40 percent of its annual revenue and a whopping 83 percent of its annual cash flow in the current quarter, Wolk estimates.

Stifel Nicolaus analyst Scott Devitt says falling sales forecasts have put in peril expectations for many online retailers, who despite their advantages over offline retailers, can’t alter the fact that consumers are using this holiday season to contemplate all the ways they can pare back spending.
–  At the time of publication Eric Auchard did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund.