MAGGIE PAGANO: Marks & Spencer puts John Lewis in the shade
Marks & Spencer will officially rejoin the FTSE 100 on Monday, taking it back into the top-tier ranking for some of the world’s most successful companies.
It marks an extraordinary revival for the retailer after it was dumped from the index four years ago after a long period of dismal trading.
The group’s return to the Footsie comes after its share price has jumped by more than two thirds over the past year on the back of strong trading, prompting a recent profits upgrade.
All credit to Archie Norman and Stuart Machin who have overseen market share rising across the piste from clothing to homeware and food.
It has been achieved by revamping the stores, investing in technology, much tighter clothing collections across the age groups and, from my experience, closer attention to that all-important customer service.
Struggles: The John Lewis partnership lost £59m in the first half of the year and warns that its turnaround plan to return to profit will take two years longer than previously forecast
Even the most sceptical analysts are upgrading their share price targets as St Michael rises again.
What’s more, Marks & Spencer has been the star performer across the retail scene this year despite the cost-of-living crisis which has seen so many competitors fall by the wayside, none more so than its rival, the John Lewis Partnership.
The contrast between the two retailers could not be greater. The employee-owned John Lewis and Waitrose lost £59million in the first half of the year and warns that its turnaround plan to return to profit will take two years longer than previously forecast. It is a terrible performance.
Group chairman Dame Sharon White blames inflation and the challenging economic situation for trading problems and the delay.
And the new chief executive, ex-Hovis boss Nish Kankiwala, says the ‘transformation to modernise’ is well under way.
Yet you wonder whether they are both missing something far more important in blaming the economy or the need for modernisation.
For decades, John Lewis has been the darling of middle-England’s shoppers, the place to go if you needed advice with buying electrical stuff or fabrics because the staff were always the most knowledgeable and helpful.
But much has changed. Retailers are more competitive. Every inch of space has to be fought over to hold on to market share. They must have the latest technology.
But retailers also have to have something more magical to persuade you to buy the same sofa or an almost identical navy blue polo neck from them and not a rival.
In the case of John Lewis, it has always been the special ethos created by its unusual ownership structure, combined with its fantastic customer service, that gave it its edge.
Andy Street, who ran John Lewis for nine years and is now Mayor of the West Midlands, told me years ago that the John Lewis magic comes directly from the founder, John Spedan Lewis, who said it is not enough to run a successful business, but that workers should share in the success.
Dame Sharon must ensure she nurtures that cohesion – and perish the thought, promote internal talent, if she is to succeed, and return to sparring with M&S.
ARM finally lifted off on Nasdaq yesterday in the biggest IPO for nearly two years in what’s being seen as a litmus test for future new US listings. The shares floated at $51 and were greeted with great fanfare. They rose almost 25 per cent during the day to close at $63.59.
It is now time for the City and No 10 to stop the moaning about SoftBank’s decision to take Arm for New York rather than list in London.
The decision was entirely understandable. Arm supplies technology to Apple and Nvidia so it is logical that the Cambridge-based company should be ranked alongside its peers.
Now the City needs to get its skates on rather than whining.
The LSE and the FCA need to move swiftly to change the premium and standard listing requirements so that ARM can also enjoy a secondary listing in London.
Banking on a rise
All bets are on the Bank of England lifting interest rates by another 0.25 basis points next week after the European Central Bank took benchmark borrowing costs in the eurozone to a record high of 4 per cent yesterday.
Looking back at the Bundesbank’s records, Deutsche Bank reckons the ECB’s 15-month hiking spree is the most aggressive since 1949.
We can but hope this one will be the last for a long time too.