Marks & Spencer faces axe from FTSE 100

Marks & Spencer has one week to salvage its spot in the FTSE 100 as it faces a potential relegation from the top flight of blue-chip firms.

The bellweather retailer is one of the few companies to have had a place in the index since it was first launched in 1984.

City watchers said its relegation after 35 years at top table would be a “historic” moment as well as an illustration of the UK high street’s doom and gloom.

M&S narrowly avoided relegation in June, but its stock has fallen further since, losing two-thirds of its value since 2015.

Meanwhile, JD Sports simultaneously made a debut after its global expansion and rising profits resulted in a surge in its share price.

At the time, it was thought that M&S managed to avoid relegation after a £601 million investor cash call following a rights issue.

Companies that are dropped out of the FTSE 100 can suffer a “double whammy” as funds invested only in blue-chip stocks automatically sell their shares.

Meanwhile, other retailers battling for a future in the FTSE 100 include B&Q owner Kingfisher, Sainsbury’s, and Morrisons.

Stock market reshuffles take place every three months and the next will be based on share prices at the close of business on September 3.

M&S has a market value of less than £3.7 billion, putting it at the bottom of the FTSE 100 and well behind a number of companies in the FTSE 250.

M&S chairman Archie Norman and chief executive Steve Rowe are overseeing the latest in a series of turnaround plans.

They have recruited TV presenter Holly Willoughby to revitalise the company’s outdated fashion collections.

By Sahar Nazir

Source Link www.retailgazette.co.uk

 

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