anything under 7 cheap cheap cheap. good div. just paid. chart looks sick

Marks & Spencer is expected to unveil its weakest quarterly trading figures for three years at its annual meeting on Tuesday, amid renewed speculation that Kate Bostock, its executive director of general merchandise, could be on the way out. The retailer's underlying UK sales are forecast to fall by 6.7 per cent in its first quarter

Up 1.7% today ahead of a widely predicted weak trading statement tomorrow.

Another notable climber was troubled retailer Marks & Spencer , which climbed 3 to 321p, ahead of first-quarter sales figures that are expected to heap pressure on chief executive Marc Bolland.

Jean Roche, analyst at Panmure, maintained her “hold” recommendation on the stock. However, she added: “Although the shares are trading at a significant discount to their historical average valuation, we continue to rate them 'hold’ as we wait for staff moves to settle down and for signs that weakness in general merchandise (for example loss of clothing market share) has been arrested. We prefer to recommend buying shares in Next (Xetra: 779551 - news) instead, and in the mid cap space, N Brown, ASOS (Other OTC: ASOMF.PK - news) or Dunelm

1st Quarter Results

· Group sales -0.7% *

· Total UK sales -0.9%:Food +2.9%; GM -5.1%

· Like for like UK sales -2.8%:Food +0.6%; GM -6.8%

· Multi-channel sales +14.9%

· International sales +0.9% *

..Marks & Spencer all at sea as Kate Bostock is shoved overboard

By Harry Wallop | Telegraph – 8 hours ago

What do you do when you are captain of the ship and you are heading for the rocks? Push a man overboard and hope the hullabaloo distracts all the passengers from the crunching sound when the ship runs aground.

Marc Bolland, under increasing pressure for the poor performance of Marks & Spencer's clothing business, has persuaded Kate Bostock, head of general merchandise, to leave the business.

M&S (LSE: MKS.L - news) says it is "by mutual consent", but Bostock has no other job to go to. She has spent much of the past two years trying to use the pages of a certain newspaper to bid up her salary. Monthly rumours would be printed that she was off to Asos.com, that she was off to New Look, that she was very unhappy. Ever since she missed out on the top job to Mr Bolland two years ago she has struggled to be enthusiastic at all the company's public meetings.

All of this served to highlight how she was failing to crack the most difficult nut of them all: return M&S to the days when nearly every woman in the country had some of its clothes not just in their wardbrobes, but also in their affections.

Will her departure be enough to turn the business around?

Let's be clear - these first-quarter figures are terrible. Yes, both April and June were the wettest respective April and June on record. This has certainly put consumers off buying swimsuits, summer blouses and flip flops, as well as deterring them from visiting the hight street. And M&S is heavily exposed, compared with many of its rivals, to womenswear and to the high street.

But a fall of 6.8pc in general merchandise is the worst since Christmas 2008, and considerably worse than overall trading, as suggested in this morning's British Retail Consortium's figures. The BRC said that non-food sales had increased by 0.1pc over the same three-month period.

Womenswear is just not up to scratch. So, too, many of the stores, far away from head office, where they are still very difficult to find your away around.

It is to some credit to Ms Bostock that M&S feels the need to replace her with two individuals. John Dixon, the head of food, is widely seen as a "safe pair of hands" who has helped steer the food offer ever more upmarket and pioneer the hugely successful Dine-in-for-£10. Belinda Earl has a mixed retailing record - great success at Debenhams (LSE: DEB.L - news) , less so at Jaeger, which nearly collapsed earlier this year, though a few months after Ms Earl had left.

One thing is for sure: this management shake-up distracts some people from talking about the more difficult business of returning M&S's womenswear to its glory years.

..M&S boss begs for more time to win womenswear war

Telegraph – 33 minutes ago
Time is running out for Marks & Spencer (Dusseldorf: MA6.DU - news) chief executive, Marc Bolland, who has pleaded to shareholders for one more year to turn around the retailer's underperforming clothing division.

At the AGM, held last Tuesday, Bolland announced seismic, strategic changes to the business - the stalwart of the high street - to try and rescue falling sales and keep himself in a job.

He begged disgruntled shareholders for one more year to see his plans come to fruition, following "very disappointing" sales in the clothing and homewares operations. The company announced that clothing revenues slumped by nearly seven per cent in the first three months of the year.

Bolland, who pocketed a £4.3m package this year, revealed a surprise management reshuffle that included the promotion of Steve Rowe from retail director to take responsibility for the food division. He replaces John Dixon, who is tipped as Bolland's successor, and will take on the crucial clothing and home department. He has also drafted in Belinda Earl, formerly chief executive at Debenhams (LSE: DEB.L - news) and then Jaeger, for two to three days a week from September as M&S (LSE: MKS.L - news) 's style director. In addition, long-time clothing executive Kate Bostock has left the business.

His strategy is underpinned by three themes - increasing internet sales, boosting overseas presence and making the utilitarian-looking stores more attractive.

He has opened stores in Paris after a decade's absence from the French market, and recruited Tesco (LSE: TSCO.L - news) 's internet guru, Laura Wade-Gery, to improve online sales.

Doubters wonder whether such plans will be the stitch in time to save Bolland after clothing sales fell nearly 7pc in the first three months of the year and City analysts have trimmed forecasts. Most now believe profits will slip this year to below £700m.

Marks & Spencer's share price closed at 316.4p on Friday, down 3pc from 327.8pc on the day of the AGM.

..

Bankers at a number of London institutions are looking at Marks & Spencer as a potential £6bn bid target as the retailer’s shares have slipped almost 50% since their highs. Bankers at a number of London institutions are looking at Marks & Spencer as a potential £6bn bid target as the retailer’s shares have slipped almost 50% since highs in late 2007. The Sunday Telegraph understands that bankers at institutions thought to include Bank of America Merrill Lynch have in recent weeks assessed the possibility of providing debt finance for a speculative bid. Although it is understood neither bank has been mandated to pursue a specific course of action, the fact that they are looking at the retailer indicates the company’s predicament. Marc Bolland, M&S’s chief executive, has been criticised amid falling sales, particularly in women’s wear, and problems in the company’s supply chain.

..Marks & Spencer climbs on bid speculation

By Ben Martin | Telegraph – 5 hours ago

Marks & Spencer (Dusseldorf: MA6.DU - news) shares rose in trading today amid speculation the retailer could become a bid target.

The group added 2.5pc today after The Sunday Telegraph reported financiers are looking at a potential £6bn bid for the retailer.

"The stock may be temporarily marked up on the back of the growing band of press stories. However, we deem that M&S (LSE: MKS.L - news) ' brand, market positions and stores to be worth a lot more than the present stock multiples," analysts at broker Shore Capital said.

market does not look to be buying into this rumour ..... guess it's certainly not impossible as M&S lost its direction many years ago ..... when i was in the rag trade (manufacturing) about 40 years ago, we didn't rate their fashion sense or knowledge, and in all honesty, it was never up to much ..... M&S was always great for basic knix and the like, but fashion, you have to be joking .... in recent years there has been more and more reliance on their food .... the quality of this is very good (if you like supermarkets!), but it has become more and more overpriced

M&S DRAWS SHORT SELLERS

Marks and Spencer (M&S) was among the top gainers for most of the session, outperforming all other retail stocks, with traders citing weekend press speculation that it could become a bid target.

The British high street heavyweight rose 1.9 percent in volume at 124 percent of its 90-day daily average.

Astec Analytics analyst David Lewis said demand to borrow the stock to sell short had increased in recent days and could indicate a willingness by some to position for a price reversal if a bid fails to materialise.

The number of M&S shares out on loan has increased by almost a third since its results in mid-July and is now at 18 percent, against an index average "in the low single digits", Lewis said.

"A rising balance on loan given the takeover rumours suggests that there is an element of the market that is positioning itself to take advantage of the currently boosted share price falling back as the rumour runs out of steam," he said. (Editing by Simon Jessop; editing by Ron Askew)

..

SP more or less where it was 10 years ago something has to happen soon or will it become another WLW/HMV?

Noticed the sp does not seem under much pressure from the likes of Next breathing down the neck of M&S. Perhaps they are starting a turn around ? May take some more time.

..STOCKS NEWS EUROPE-Marks & Spencer tops FTSE 100 on CVC bid report

Reuters - UK Focus – 6 minutes ago


......
Shares in Marks & Spencer (Dusseldorf: MA6.DU - news) rise 3 percent in heavy trade after a media report on Friday says that CVC Capital Partners has explored taking the British clothing and food chain private.

The buyout firm has not moved beyond a preliminary examination of the retailer and is not currently thought to be pursuing a bid, the report from Bloomberg said, citing people close to the matter.

As well as being the biggest gainer on the FTSE 100 (Euronext: VFTSE.NX - news) , second-top gainer on the FTSEurofirst 300 (FTSE Index: E3X.FGI - news) and leading the STOXX Europe 600 Retail index higher, Marks & Spencer is the most actively traded FTSE 100 stock as the index enters the final hour of trade, at 1-1/2 times its 90-day daily average against just over a third for the broader index.

A spokeswoman for Marks & Spencer said the company would not comment on rumour and speculation.

Reuters messaging rm://rosalba.obrien.reuters.com@reuters.net

..

possible bid coming, plenty of smoke no fire yet?

..UPDATE 1-Marks & Spencer bid talk boosts shares

Reuters - UK Focus – 1 hour 6 minutes ago
* Report says CVC (Taiwan OTC: 4744.TWO - news) had explored taking company private

* Says not currently pursuing a bid

* M&S (LSE: MKS.L - news) says won't comment on speculation

* Shares close up 3.9 pct, hit five-month high (Adds comments)

By Sophie Sassard and Rosalba O'Brien

LONDON, Aug 24 (Reuters) - Persistent bid rumours surrounding British clothing and foodstores chain Marks & Spencer Plc pushed its shares up over 4 percent on Friday, as a media report added to speculation that private equity could be getting ready to swoop.

CVC Capital Partners has already explored taking the company private, Bloomberg said, citing people close to the matter, but added that the firm is not thought to be currently pursuing a bid.

M&S shares closed up 3.9 percent at 370.5 pence, the biggest gainer and the most actively traded stock in the FTSE 100 (Euronext: VFTSE.NX - news) index , with several traders attributing the rise to the report. The stock hit a peak of 385.9p, its highest since March.

However, a source familiar with CVC's thinking said prospects of a deal happening remained uncertain. "If I were you, I would not spend too much time on this," the source told Reuters.

M&S shares have risen around 10 percent since the beginning of August amid reports of private equity or sovereign wealth fund interest.

In May the 128-year-old group posted its first drop in annual profits in three years, as even its relatively older and more affluent shoppers feel the chill of recession in Britain.

The company's strong brand could help make it a logical target for a leveraged buyout, said market watchers who closely follow M&S. Private equity firms like CVC, Advent, Lyons Capital and Bain have all looked at it, they said.

However, with a market capitalisation of around 5.7 billion pounds ($9 billion), any prospective buyer of the firm would need deep pockets at a time when the euro zone crisis means debt markets remain tight.

CVC would not be able to go it alone and would need to build a consortium of funds, a sector banker said, but may be shrewd to position itself now so as to be ready to make a move when funding conditions become more attractive.

Alternatively, a deal may come from across the Atlantic (Stuttgart: A0J3C9 - news) , with U.S. funds such as KKR (Frankfurt: A1C10P - news) and Carlyle having access to better funding than their European peers and looking for sizeable deals of this kind, said a London-based hedge fund manager.

A spokeswoman for Marks & Spencer (Dusseldorf: MA6.DU - news) said the company would not comment on rumour and speculation. ($1=0.6323 British pounds) (Editing by Greg Mahlich and David Holmes)

..

..M&S bid talk merely throws the spotlight back on Bolland’s record

By Damian Reece | Telegraph – Fri, Aug 24, 2012 21:50 BST

MKS.L 371.70 +15.20

......
Investment banks were carrying out work on funding for a private equity-backed bid for Marks & Spencer (Dusseldorf: MA6.DU - news) , The Sunday Telegraph reported three weeks ago.

Today CVC, a large private equity fund, was reported by Bloomberg to have approached executives, both inside and outside the retailer, about possible management roles under private equity control. In between times The Financial Times opined “Ailing M&S could be ripe for takeover”.

There are plenty of hurdles to a deal. It has been five years since the last FTSE 100 (Euronext: VFTSE.NX - news) company was taken over by private equity and that came at the peak of the credit boom when the market was awash with cheap money.

Money is cheap again now, but it’s in short supply and covenants are much stricter. There is incredulity in some quarters that anyone would have the ambition to mount such a deal when the eurozone crisis could engulf the UK economy, and its high street, at any time.

M&S (LSE: MKS.L - news) is biggish, although it’s half the size it was 10 years ago. A bid would be a case of mounting an offer for a company equivalent to the size of, say, Next (Xetra: 779551 - news) — which makes it sound more plausible.

So with an undisturbed market value of £5bn, plus a typical 30pc premium, the company’s equity would cost at least £6.5bn, possibly up to £7bn, only half of which would be funded by debt. That leaves the financing a complex syndicate job on both the equity and debt sides of the deal. Buyers would also have to assume M&S’s £1.9bn of net debt.

But could a bidder extract much value from M&S? As a mid-market high street retailer it is suffering as much as anyone from the downturn and its trading is deteriorating. It has spent as much on share buy-backs and brightening up its stores in recent years as its current stockmarket value so to meaningfully boost returns it will have to take a huge axe to costs (job losses) and investment, though well incentivised retailers could make it trade better.

This may all remain on the investment bankers’ drawing board. But one thing the takeover talk will do for sure is shine the spotlight even more brightly on the performance of Marc Bolland, chief executive.

The only way the takeover gossip is going to stop is if his performance improves. Far from being a distraction, M&S being sized up as a bid merely adds to the pressure on Bolland.

damian.reece@telegraph.co.uk

..

A revival at Marks & Spencer is not guaranteedBy Rupert Steiner
PUBLISHED: 21:54, 31 August 2012 | UPDATED: 11:18, 1 September 2012

As tempting as it is to view the recent spike in M&S’s shares as a signal that it has turned the corner, nothing could be further from the truth.

Froth around a new giant flagship store that opened in Cheshire Oaks last week, and bid speculation connected to private equity firm CVC, has sent the shares up from a year low of 316p to top 370p last week.

While they might be trading on a price earnings ratio of 11.1 times up from 9.8 times six weeks ago, when the firm reported weak first-quarter sales, any bid is likely to be fiercely resisted and the new store format has yet to be proven.


At the helm: Marc Bolland is pinning his reputation on turning around M&S
On the back of upbeat earnings forecasts for 2013, and a dividend yield of 4.7 per cent, the shares have outperformed their peers.

But as the speculation bubble deflates and the challenges ahead become starker, the shares look overpriced and are vulnerable to a correction.

Now is not the time to pile in.

M&S has had a dire year in which a number of key executives jumped ship and it posted its worst quarterly figures since the start of the recession in 2008.

The shares are still trading below the 400p offer made by Sir Philip Green in 2004 and are almost half the 745p peak seen in 2007 just before the downturn hit.
More...MARKS & SPENCER SHARES: Check the latest price here

A private equity bid is, of course, beyond boss Marc Bolland’s control. He is pinning his reputation and the future of the group on the new store format which at 150,000 sq ft is the firm’s second-biggest outlet after London’s Marble Arch, the highest-earning shop in the group.

At Cheshire Oaks, customers face a very different proposition to Marble Arch.

Walls are filled with 70in plasma screen televisions and shop staff are armed with iPads.

This is no ordinary new format shop. It is the shape of M&S’s latest concept which, if successful, is set to be rolled out across the country during the next few years.

Complete with a new skincare department aimed at taking on Boots, and in-house bakeries and deli counters, as well as a new-look home department, the large two-level glass and wood store looks more like Heathrow’s Terminal 5 than Hampstead High Street.

M&S’s revamped home section is the first department at the entrance of the cavernous upper level. Bedroom and bathroom displays, a cross between Heals and Ikea, sprawl as far as the eye can see. Giant 15ft letters spell out HOME and there is a ‘bedding wall’ featuring cut out samples of pillows, duvets and mattresses explaining the difference and allowing customers to touch and feel products that are usually hidden away in their packaging.

The store has tables with iPads allowing customers to shop online or research items that are not on display.

There are also touchscreen panels where, in the bedding department, customers input answers to a series of questions such as ‘what side do you sleep on’ and ‘do you suffer allergies’. The computer then makes recommendations on various products.

It’s state-of-the-art stuff which Bolland hopes holds the solution to the retailer’s sluggish growth.

But for the 13 weeks to June 30, clothing sales slumped 6.8 per cent and for all the glitz and glamour the new store does not fix this fundamental problem.

Bethany Hocking, a retail analyst at Investec, is not convinced: ‘Some areas were less impressive, such as impersonal M&S woman areas, and at times weak in-store signage.’

While some have said M&S’s womenswear ranges have been out of fashion this year, M&S insists that problems getting enough stock on to the shelves have been fixed.

But a deeper issue which could have a long-term impact on the shares is the cost of rolling out the new store concept and whether the additional sales will recoup this investment.

Hocking says not: ‘We forecast £2.4bn of capital expenditure between 2013 and 2015, which is 40 per cent of the firm’s market value.

‘We believe it is highly unlikely to generate acceptable returns from this spend.’

Jean Roche, an analyst at Panmure Gordon, is less cautious but does think it will take time before any improvements seep through.

‘We are positive on its strong brand, exposure to a relatively wealthy customer, investment into improving its multi-channel model, growing international business and the renewed strength of the food business.

‘While management has taken steps to improve the performance of the main point of weakness, the general merchandise division, a change to a more positive performance will take some time.’

In fact, most analysts see M&S as a long-term play for investors who got in some time ago when the shares were considerably cheaper.

Now is not the time to top up.

:-))

Bit of a punt DC, went long yesterday on the spreads @ 360.5 Target 390.0 Stop 355.0.

Stop to entry for risk free trade.