You are currently browsing the tag archive for the ‘Marks and Spencer’ tag.

The risk to Marks and Spencer (MKS, 222p) was obvious from what I perceived to be exposure to a customer base with limited spending power. The whiff of Lily of the Valley with a faint hint of urine as I descended the escalator to the underwear and luxury foods hall at Marks’ Aberdeen branch betrayed the identity of a large part of the  groups customer base, the female pensioner.

When the mother in law switched her twice weekly shop from the nice fish and pre cut green beans in the food hall at Marks to the scrums at ASDA was when the profit warnings started. With UK interest rates collapsing, the purchasing power of this segment of Marks’ customer base has now evaporated.

But we have seen directors starting to buy shares, although in limited volumes.

I was tentative when Marks’ Deputy Chairman Sir David Michels picked up 84,000 shares in July and August between 249p and 265p (See ‘Marks- Sir David Michels increases holdings by 50%’).

Marks have however outperformed the index since August 16th, by 8%.

I still am tentative when I see Non Executive Director Jan du Plessis buy 20,000 shares at 222p (January 21st 2009), initiating a position in the group having been appointed non exec on November 1st 2008.

Du Plessis earned his stripes as CFO of the Swiss and South African luxury goods group Richemont for 16 years to 2004.

My view on Marks remains unchanged until I see more directors committing capital in bigger $$ amounts, something which may happen soon. Come on Mr Rose.

View on Marks and Spencer: Positive

Strength of Signal: Weak (requires further director buying to move towards Strong)

For all Marks and Spencer comments on this site, click here: Marks and Spencer

M&S (MKS, 276p)

Deputy Chairman Sir David Michels on August 14th bought 37,734 shares at 265p, taking his holding to 113,984 shares. This is in addition to his recent purchase of 47,500 shares on July 29th.

The retail sector has been firm recently on the back of weaker oil prices, maybe anticipating that inflation in the UK will fall away in the coming months.

I mentioned in my last post of July 30th that I needed to see more commitment from other directors before buying shares myself. Thursdays purchase by Michels hasn’t changed this.

Signal strength for M&S remains WEAK

On the 29th of July we saw the Chairman of Marks and Spencer David Michels (MKS, 257p) add to his holding by buying 47500 shares at 248.75p.

Is this significant ? NO.

1. This is a relatively small amount of money (£118,000)

2. No other directors are buying shares at the moment. The last significant purchase was in January by Stuart Rose, who invested £1m at 411p.

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