M&S has taken its US stores off the market

The group, which put Kings Super Markets up for sale in 2001, had agreed a $160m (�99m) sale to D'Agostino but the deal fell apart last December after the New York retailer failed to secure financial backing.

M&S has now abandoned plans to sell the store, with chief executive Roger Holmes saying: "In the current US climate it has not been possible for interested parties to raise sufficient funds to purchase Kings at what we perceive to be a fair price."

The Kings sale formed part of a wider restructuring plan, which included the closure of 38 loss-making M&S stores on the European mainland, aimed at restoring the company's flagging fortunes.

The European store closures went ahead, helping to revitalise M&S performance over the past 18 months.

Mr Holmes said the company would now strive to maximise Kings' value by boosting its financial performance.

Kings has struggled in a difficult US retail climate, with sales falling to $290m in the most recent financial year, down from $329m the year before, while operating profits dipped to $7.9m from $12.6m.

M&S shares were up 2.5p at 315.5p in early trade in London.