MARKS & Spencer halted a two-year trading slump yesterday after new ranges and an overhaul helped the embattled retailer to a surprise pick-up in sales.

The food, clothing and homeware retailer posted its first quarterly sales rise since October 2003 and said profits would be at the top end of expectations.

Chief executive Stuart Rose drew encouragement from the performance, but warned it was still early days in the recovery battle - particularly with the key Christmas trading season just around the corner.

Shares in M&S responded by hitting their highest level in more than three years yesterday - close to the 400p level that retail tycoon Philip Green was willing to pay for M&S in last year's failed takeover attempt.

The 1.3 per cent increase in like-for-like sales for the 12 weeks to October 1, compared with a decline of 5.4 per cent in the pervious quarter.

Among changes, M&S has attempted to secure better deals from suppliers and kept tighter control of stock.

It has also embarked on a pre-Christmas advertising drive featuring Sixties supermodel Twiggy.

Richard Ratner, retail analyst at stockbroker Seymour Pierce, described the performance as "excellent", with much of the credit going to Mr Rose.