M&S turnaround wards off buyout vultures

Empty shelves are seen behind an M&S logo at a Marks & Spencer food store in Paris, France, January 5, 2021.

LONDON, Aug 20 (Reuters Breakingviews) - British underwear purveyor Marks and Spencer (MKS.L) is snapping back. On Friday the retailer upgraded its profit outlook after a jump in demand for food. An accompanying surge in online clothing orders suggests its turnaround is finally working read more . Pent-up demand post the pandemic is a stroke of luck, but M&S may also be reaping the rewards of a management overhaul and efforts to modernise the business. Shares jumped 12%.

That will be a relief to Chief Executive Steve Rowe, who’s no doubt aware that bankers have been trying to flog the 137-year-old outfit to private equity for years. The current battle for Wm Morrison Supermarkets (MRW.L) has put British retailers firmly on barbarians’ menus. Friday’s price rise means M&S is trading at 12 times earnings for the year to March 2022. That narrows its discount to Morrison’s 21 times. Delivering more consistent growth will further boost Rowe’s defences. (By Dasha Afanasieva)

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