Marks & Spencer has returned to the FTSE 100 index of Britain's biggest listed companies for the first time in four years after a surge in the retailer's share price.
M&S was relegated from the index in 2019 as it faced falling sales and stiff competition. This year, its share price has risen by more than 75% after a revamp of it shops and clothing range. Chief executive Stuart Machin said it was a “reflection” of its “hard work”.
“We've just got to crack on with the job and make sure we continue our positive momentum”, Mr Machin added.
M&S has staged a “remarkable” turnaround despite soaring consumer prices, analysts said. The retailer told investors earlier this month that its interim results, scheduled to be published in November, would reveal “a significant improvement” in its performance.
Susannah Streeter, head of money and markets at broker Hargreaves Lansdown, said: “Shrinking its estate, and closing larger stores in town centres, has also been paying off.”
The FTSE 100 contains the 100 largest UK-listed firms, ranked by market value. Membership of the index, often referred to as the blue chip index, is seen as a mark of prestige and M&S was one of its founding members.
The index is reshuffled four times a year, allowing a handful of companies to enter, while a number of stragglers slip out into the lower tier FTSE 250. Housebuilder Persimmon and investment manager Abrdn are among those firms who were relegated.
M&S has plans, for example, to significantly increase the number of external clothing brands it sells online in a bid to entice shoppers away from High Street rivals Next and John Lewis, and has already started stocking items from Crew Clothing, Nobody's Child and Joules.
Russ Mould, investment director at broker AJ Bell, said: “M&S' return to the FTSE 100 after four years will be seen by some as a validation of the turnaround strategy launched by Steve Rowe and then followed through by his successor Machin.”
He said the food business has continued to perform solidly, “helped to a degree by the affluent demographic that it serves”, while the clothing business has received a “much-needed shot in the arm from the team brought in from the collapsed Arcadia empire of Philip Green”.
— CutC by bbc.com
