Is the future Rosie at M&S?

As investors back a great British brand at what could well be a bargain price, analysts ask . . .

Everyone has an opinion on Marks & Spencer, often unflattering and, occasionally, based on a misconception. Many people think the 136-year-old business cannot be revived.

But more than a third of bras are bought from M&S, and a surprising tenth of denim.

And it does not have the liquidity issues of some struggling competitors.

But, despite successive revamps and links with Tv presenter Holly Willoughby and model rosie Huntington-Whiteley ( pictured), the stores still lack the magic of rivals such as Zara.

This leads to the mistaken supposition that M&S cannot conjure up great fashion. Persuading someone that a chic outfit did actually come from Marks is tricky, as I have frequently found.

earlier this year M&S shares sank to their lowest since the early 1980s.

Its £2.1bn market capitalisation is less than half that of Boohoo, the super-sexy online fashion player.

However, M&S is about to implement a strategy designed to change its image and direction, embracing the data-driven model of retailing, today’s prerequisite for success.

So will it finally succeed in reversing the decline?

From September, the online supermarket ocado, renowned for its technology, will be delivering M&S food and some clothing.

M&S invested £750m in this joint venture last year.

But some analysts reckon that the stake may be worth as much as £1bn, following the doubling of online grocery demand at other supermarkets during lockdown.

Archie norman, the M&S chairman, has predicted that, post-pandemic, ‘ the world will never be the same again’.

Changes in consumer behaviour seem to bear out this forecast. During lockdown, about 365,000 existing customers shopped online with M&S for the first time. They were joined by a new clientele, mostly mothers in search of childrenswear, leading to a 65pc rise in use of the M&S app.

This raises hopes for the ocado partnership which is so crucial to the future. Food accounts for twothirds of M&S revenues but currently it has only a 4pc share of the grocery market.

one hurdle is that a delivery service is only economic on a grocery basket of £80-£100. This is larger than the average spend at M&S which, traditionally, has been seen as a source of treats, rather than staples.

Several City analysts like the M&S food plan. But they point out that selling more of its affordable luxury fare online risks cannibalising store sales. It could also hit impulse purchases of clothing: if people order online, they won’t spot that tempting garment on their way to the food hall.

These were problem areas before the pandemic forced temporary store closures and the hibernation of summer stock until 2021. The myriad causes of the malaise include dispiriting displays that can weaken even my allegiance, and I am a real loyalist. Decisions made by male-dominated head office committees have been blamed for incoherent and excessive stock ordering. But under the leadership of chief executive Steve rowe, there has been a drive to ensure the reliable availability of stylish essentials for the 35-year-old and her equally trendconscious mother.

The ambition is to sell more online – 23pc of clothing is already bought this way. But improving the look and location of shops is also a priority. Around half of the 110 stores set for closure have already shut. M&S may look at

pulling up the shutters on more and is likely to be seeking rent concessions on the rest, to help it save £300m. M&S will not be paying the final dividend for 2019-2020 and there will be no payout in 2021 either.

Scarcely enticing, yet in lockdown, M&S shares have been the most popular retail sector buy at Hargreaves Lansdown. This may have been spurred by the wish to back a great British brand at what could be a bargain price.

Anyone encouraged to follow them must have patience, however. The uncertain environment for retail means that a revival is not assured and may take years.