High street icon Marks & Spencer is to shed more than 1,200 jobs and close 27 stores.

The retail giant, with outlets across the county, is the latest victim of the economic downturn that has swept away well-known names like Woolworths and MFI and plunged others like Zavvi and Adams childrenswear into administration.

Marks confirmed it would be cutting 780 jobs at the outlets it planned to close, with a further 450 at its head office in London. Overall, around two per cent of its 72,000-strong workforce will lose their jobs.

Most of the stores scheduled for closure are specialist food shops trading as Simply Food, plus two smaller main outlets. The company said it would not be announcing which stores would be affected until all affected staff affected had been told.

Marks & Spencer reported that like-for-like sales in the UK fell 7.1 per cent in the 13 weeks to December 27, a period that included heavy discounting and promotional sales offering 20 per cent off.

Overall UK sales, taking into account new store openings, fell by 3.4 per cent. Most of the hit came in clothing (down 6.5 per cent) with food only losing 1.1 per cent. Overall group sales fell by 1.2 per cent.

Online sales went up by 29 per cent, and international sales also rose - by almost 27 per cent. Profit margin was cut by discounting and competitive pressure.

Sir Stuart Rose, chairman and chief executive, was generally upbeat, pointing to a record trading day on December 23 (sales of £50m) and the fact despite lower sales, it maintained its share of the clothing market.

He said job cuts and other cost reduction measures, including changes to the pension scheme, would save the company £175m - £200m in 2009/10.

"We are aware that the proposed changes will be difficult for those members of staff impacted, but given that we expect challenging economic conditions to continue for at least the next 12 months, we believe we are taking the right action to maintain the strength or our business."

He added that the company was committed to maintaining a strong financial position and had no short-term financing needs.

Meanwhile, Marks & Spencer rival Next suffered a seven per cent like-for-like sales decline over the Christmas period. Another competitor, Debenhams, reported sales down 3.5 per cent. Share prices in both retailers rose as investors reckoned the figures were better than expected.