James Moore: M&S is back in fashion, but how long will its resurgence last?


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Outlook Something strange has happened at M&S. The beleaguered retailer finds itself in an unusual position: thanks to its fourth quarter trading statement it is in fashion both on the high street and in the City.

The shares have shot up to levels not seen for seven years as the fashion world has been gushing about a certain suede skirt.

Priced at £199, the likes of Alexa Chung and Olivia Palermo have been pictured wearing it. For the uninformed (and I admit to being among them), the former is a TV presenter and model and the latter is a US socialite.

One thing I do know about the people in their social strata is that they’re not commonly seen out and about in M&S clobber. So getting them pictured with it on is quite an achievement.

A £199 skirt, no matter how special, won’t turn a business around on its own. Apart from the fact it hasn’t gone on sale yet, at that price it’s hardly a mass market product.

But it could still act as a catalyst. That’s the role this suede skirt appears to have played, with M&S recording its first sales growth in nearly four years.

It hasn’t hurt that the retailer has managed to keep its shelves more or else filled with other garments people want to buy alongside it. That’s been a problem in the past, and while the business’s distribution problems aren’t exactly over things do appear to be improving.

Hence the surfeit of something else M&S has had trouble supplying to both its customers and its investors: optimism.

Given that, it might seem a bit mean to rain on its parade. We’re supposed to encourage the plucky underdog, aren’t we? And after a truly woeful Christmas, knocking M&S is certainly that.

The trouble is while the 0.7 per cent rise in sales recorded by M&S in its fourth quarter was better than expected, it needs to be seen in the context of the 14 consecutive quarterly declines that went before it. And yet the shares now sit on a multiple that isn’t far off that of Next’s, a company that can hardly see M&S in its rear-view mirror these days. The chief executive Marc Bolland is going to have repeat the trick if he’s going to justify that.

Retail Remedy, a consultant, appears to think that he can arguing that the results “hint that M&S is returning to what it should be – a clothing retailer with a successful sideline in food”, rather than the other way around. Let’s just see, shall we? It pays to remember that false dawns have been in fashion at M&S for a long time.