* M&S, Next, Sports Direct see record intra-day falls
* Supermarkets also hammered
* Hurt by sterling weakness, prospect of economic slowdown
By James Davey
LONDON, June 24 (Reuters) - Shares in British retailers werehammered on Friday as the country's decision to quit theEuropean Union hit sterling and raised the prospect of anotherrecession.
Some of Britain's best-known retailers, including Marks &Spencer, Next, Debenhams and SportsDirect, endured record intra-day falls as the cost ofBritain's retreat from Europe was priced in.
Supermarkets Tesco, Sainsbury's andMorrisons suffered double-digit percentage falls.
Analysts highlighted the double whammy of likely weakened UKconsumer sentiment and the sourcing pressures of a devaluingpound after sterling collapsed to its lowest level versus theU.S. dollar since 1985.
"It is highly likely there will be a slowdown in (economic)growth, even if only short term, which does impact consumerspending power," said analysts at Verdict, the retailresearcher. Credit Suisse now expects Britain's GDP to fall 1percent in 2017.
Analysts said spending on big ticket items could be deferredand the housing market would likely slow as people are put offmoving.
With the majority of British retailers' non-domesticpurchasing done in U.S. dollars, a weaker pound has a majorimpact on their buying costs.
Jefferies' analysts pointed out that a 1 percent cut inlike-for-like sales has a 1 to 10 percent impact on UK non-foodcompanies' earnings estimates, while any 10 percent hit to thesterling/dollar exchange rate has, in most cases, a 10 to 20percent impact on earnings.
Shares in Sports Direct plunged up to 43 percent beforerecovering to be down 15 percent by 1457 GMT.
It highlighted the material changes to the pound/dollarexchange rate and the lack of transparency of those rates in theshort to medium term.
"These factors are likely to impact purchases for which thecompany is currently not hedged for the full-year 2017 periodand beyond," it cautioned.
Shares in M&S plunged up to 30 percent, but recovered to bedown 10 percent.
"We will be monitoring and assessing the impact on ourbusiness as the situation evolves," said a spokeswoman.
Though a weak pound makes British goods cheaper abroad,helping British retailers with international operations, theBrexit vote will also raise questions about unfettered access tothe EU market.
Speaking on Thursday, before the Brexit vote result, TescoCEO Dave Lewis said a run on sterling would have an impact onthe price of sourcing some categories.
"It's something that's going to affect the industry and notTesco disproportionately," he said.
Some analysts said Tesco, Britain's biggest retailer, andMorrisons could actually benefit from a rise in food inflationif they are able to pass on the higher cost of goods toconsumers.
The vote for Brexit could also have an immediate impact on merger and acquisition activity in the sector.
South Africa's Steinhoff said on Friday Britishsingle price retailer Poundland had rejected itstakeover proposal. Given the impact of the referendum voteSteinhoff said it was now "considering its position." (Editing by Adrian Croft)