Marks & Spencer’s comeback rests on more than navigating the challenges raining down on the retail industry. The high street stalwart has been in turnaround mode for more than a decade.
The discount attached to M&S, shares of which trade at only nine times forward earnings, is firmly embedded. Multiple obstacles have been placed in front of the group: stuttering growth in its clothing and home division; weighty lease liabilities; and meaty not-so-exceptional costs that come with reshuffling the store estate. That’s not to mention the absence of a dividend.
Cost inflation and tighter consumer spending, together with the restart in business rates, mean there is no improvement in earnings prospects in sight, at least in the near-term. Analysts expect adjusted pre-tax profits to decline
