More sparkle on way from Marks & Spencer

Marks & Spencer entered Christmas this week, introducing its festive gift lines and fashion, modeled by Sienna Miller.

The film star is the new face of women’s fashion at the 139-year-old High Street chain.

Miller looks smartly edgy rather than dowdy in the coats and sweaters, highlighting the new, more adventurous vibe at M&S, which rises from the FTSE 250 to the FTSE 100 on September 18.

In tune with this more assertive stance, M&S is also taking its fight with Housing Secretary Michael Gove to the next level, determined not to be thwarted in its ambition to rebuild its Marble Arch flagship. Gove has refused permission for construction.

But M&S ​​is also focusing on Christmas, an important season for all retailers, when it will offer four different home decor styles, including Classic Heritage, Enchanted Forest, Islandic Retreat and Kitchen Disco, which all involve lots of sparkle.

The £199 silver leather trousers from the winter collection would add extra sparkle.

M&S’s return to the FTSE 100 also presents investors with some interesting options.

Its shares have risen 80 per cent to 221.9p since the start of the year, thanks to a rebound in full-year profits and expectations that 2024 could also be rich. Is this price rebound as good as it seems? Or could M&S be appreciated more?

The chain is upgrading its store network and striving to further increase its share of the clothing market from its current 9.3 percent, increasing the elegance of its own-brand products, while adding more third-party brands.

Hobbs, Nobody’s Child and Sosander are among the names already available.

Jonathan De Mello, of consultancy JDM Retail, says: “M&S is performing very well, generating value growth in fashion, but also volume growth, which is what you want to see at a time of high inflation.” Behind the scenes, the business is also being improved, under the leadership of joint chief executives Stuart Machin and Katie Bickerstaffe and Archie Norman, the chairman.

Debt has been reduced, as Shore Capital points out, and last year’s £255m acquisition of logistics provider Gist is improving supply chains in the food division.

M&S aims to increase its grocery market share from 3.4 per cent to 4.5 per cent within five years.

In theory, this would be facilitated by a braver performance of the joint venture with Ocado, whose failures are a particular source of ire for Machin, Bickerstaffe and Norman.

But De Mello argues that selling more food will depend on attracting more customers to stores, with “remarkable value” and variety as Britons move away from online grocery shopping.

Here I admit that I keep an eye on what other customers buy in M&S’s food, clothing and home departments. Before I was only interested in consumer habits. But now there are other reasons for my curiosity.

Last November, as I wrote in this column, I finally became a shareholder in M&S. This was based on the calculation that most of my wardrobe comes from M&S and I also buy my family’s food and household items there.

I believe in the benefits you can get by investing in what you know, although this is not a hard and fast rule as claiming to be familiar with how tech groups work would be impossible for an outsider.

My stake is now worth 84 percent more, which is gratifying.

But I also note that the stock is still down 25 percent in five years and 55 percent in 10 years, illustrating the travails of this retail stalwart over that period.

Some shareholders will remember that M&S ​​shares hit 707p in April 2007, when M&S was on the rise in fashion and Layer Cake star Miller, 41, was on the cover of American Vogue’s September issue.

Analysts do not expect the shares to reach their 2007 highs. The most optimistic price target is 300p. Most rate the shares as held, which is what I intend to do, while I acquire some more.

The reasons for my optimism are the retailer’s ability to remain resilient and innovate in the midst of a cost of living crisis. The last clothes are different.

The fall and winter coats, some of them worn by Miller in the new campaign, should appeal to women who want something more formal than pandemic-era puffer jackets.

They certainly appeal to one coat-loving woman in particular: me.

My eye for a bargain – which means I’m wary of discounted yellow labels on food – means I’m considering other ways into M&S, such as the Temple Bar investment trust, whose shares are at a 7 per cent discount to the net price. value of its assets.

These holdings are big British names, including a part of M&S that the nation is taking seriously again.