Marks & Spencer (MKS)

[monabri]

A possible HYP candidate but I'm concerned that the company is going in the wrong direction. It seems the strategy is to wave the white flag in the clothing sector and move more predominantly in to food sales. Do people do their main shop for food at M&S or do they just treat themselves to the odd item? I deliberately make trips to my local store to see what is happening. My observations of my local shop are:
- Parking is not free and is shared with the rest of the town's shoppers
- shoppers tend to top up a few items in hand baskets
- shoppers tend to be "of a certain age" (i.e my age )
- there are lots of staff ...I counted more staff than shoppers on my last 3 'visits'
- access to the car park with a trolley is currently difficult
- the clothes part of the store has been empty-ish

I really don't see M&S taking too much business from the local Morrison's , Tesco, Aldi, Sainsburys (entering into a V competitive arena).

Will M&S be able to utilise the space efficiently (sales per square foot)?

Any views, anyone considering Marks & Sparks as a new addition?

[Horsey]

I suspect the profit margins from M&S's food and wine range vastly exceeds what they make from clothing - people like my parents are prepared to pay extra for perceived improvements in quality. The food oriented stores are also likely smaller (cheaper to lease) and generate much more footfall per sq meter.

I wouldn't see them as competing with Tesco/Sainsburys, but rather with Waitrose, and in that sense they have many more stores.

Personally, not one that I'd touch.....part of me wants to flog off my Tesco and Sainsbury holdings and buy Amazon instead, but with a PE of 180 I do wonder if that would be a sensible move!

[Arborbridge]

there are lots of staff ...I counted more staff than shoppers on my last 3 'visits'

This is one of those factors you can praise or condemn, depending on your mood! There aren't enough staff in shops when you need them, but too many when you don't. In my experience, they have it just about right in our local Marks - although I'd say they could do with a few more around if anything. Furthermore, they seem helpful, engaged and fairly well informed, and believe me, that is unusual in Croydon where the average shop assistant is a robot with dead eyes and no smile.

Arb.

[tea42]

The idea of the food was to draw in shoppers through the clothes. But, they found they could make money out of high quality food and wine too so now it has enhanced status. Mark's has periods when it gets clothes totally wrong. I don't believe they will ever get it right continuously. As a high street retailer they also face the increasing internet challenge and the cheap throwaway fashion from Primark now practiced by teens and twenty somethings. For those reasons I'm out..

[JMN2]

I used to shop there for underwear, socks, summer shirts, pyjamas, IIRC I even bought a suit once. Last year I got a gift voucher and visited three different shops and couldn't find anything to buy - unfortunately I am good for underwear for a few years. The range of clothes had become very poor. I visited Guildford, Sevenoaks and Redhill shops.

Food shopping there has never been regular for me but one does see wealthy looking pensioners there as the quality is superior, and I do shop there to treat myself, very seldom.

I get the shareholder vouchers each year but gift them away.

[Arborbridge]

As a high street retailer they also face the increasing internet challenge and the cheap throwaway fashion from Primark now practiced by teens and twenty somethings.

Since when was Marks ever in favour with teens or twenty somethings? - never in my lifetime, so I don't see that as either unexpected or an issue. The ladies' ranges for this Spring look pretty exciting to me. Intereting patterns, styles and cheerful colours.

Nearly all that I wear has come from Marks for many years, with the exception of technical clothing for walking or sailing, or shoes. I don't need to go anywhere else.

It sometimes seems that people like to knock Marks from habit rather than with any good reason. Like the infamous year in which people complained that everything there was so dark a dismal are regards clothes, yet failed to notice that Next was equally dark and dismal.

Arb.

[idpickering]

Any views, anyone considering Marks & Sparks as a new addition?

Not one for me. I prefer my Sainsbury holding TBH.

Ian.

[Raptor]

I topped up MKS last year.

My local M&S is one of the larger ones, always seems to have plenty of footfall, the cafeteria is always busy and hard to find a table, all sections seem pretty busy, except the bank, which is nice as I only go there for foreign currency as they do a deal for M&S card holders (or have done) where you get an improved rate and you can use your credit card for no extra charge.

I have to admit that I have been switching to NEXT for cloths as they converted a large Homebase to one of their large format stores (almost next to the M&S) and for me the selection of menswear is better. Although I do use the shareholder vouchers and relatives still send me the odd voucher at Xmas and birthday, always find something that looks good, is needed and fits well, so no complaints from me, in fact noticed that they have started supplying gym tops with that microfibre that takes away the "water" (ok sweat), so brought that last time and they look good and work well.

Will they ever get back to their iconic position? Doubt it, but I still hold out hope of a long and prosperous association with them.

Raptor.

[tjh290633]

Any views, anyone considering Marks & Sparks as a new addition?

I've held them since my mother left me them in 1970. I topped up in February and in November 2016, and they are currently just above median holding value, but are second highest contributor to dividend income, after TW.

They have had their ups and downs recently, but back in 1970 the price was rising so quickly that they had frequent scrip issues to hold it down. In 14 years the number of shares multiplied almost 12 times because of this. My IRR over 47 years has been 10.75%. The dividend has been rising gently since the reduction in 2009. 15p then, 18.7p plus a 4.6p special dividend last year, and the interim is unchanged this year.

Not currently on my top-up programme. Ruled out by the contribution to income.

TJH

[Wizard]

My local M&S is one of the larger ones...

I have to admit that I have been switching to NEXT for cloths as they converted a large Homebase to one of their large format stores (almost next to the M&S)...

Camberley?

[Raptor]

My local M&S is one of the larger ones...

I have to admit that I have been switching to NEXT for cloths as they converted a large Homebase to one of their large format stores (almost next to the M&S)...

Camberley?

Meadows yes......

[jackdaww]

i am considering them - perhaps if they get to 300.

a new CEO could trigger improvements - or not .

but i did read something about off balance sheet items - accounting issues?

many of my clothes are M&S - but i didnt buy them there.....

[TUK020]

My local M&S is one of the larger ones...

I have to admit that I have been switching to NEXT for cloths as they converted a large Homebase to one of their large format stores (almost next to the M&S)...

Camberley?

Meadows yes......

Sounds like a Lemonfool social one evening in Meadows M&S coffee shop would catch a few participants

[Raptor]

Camberley?

Meadows yes......

Sounds like a Lemonfool social one evening in Meadows M&S coffee shop would catch a few participants

Next time we get some shareholder vouchers for the cafe then?

Raptor.

[Lootman]

I've taken the view that the entire retail sector is suspect. The supermarkets have been for some time, of course. But Amazon is just taking market share from everyone. In the US major department stores are closing by the hundreds, shopping malls are struggling to find tenants and local shops are suffering too. Amazon already has same-day delivery to most locations and they will have 2-hour delivery at some point. Who is going to take an hour out of their day to go to the shops and buy something when you can have the item delivered to your home in 2 hours?

Every retail share I own (which fortunately isn't many) is down since I bought it whilst my Amazon shares are up 50%. OK, no yield so not a HY candidate. But the effects of Amazon could mean that no other retail share is either. Retail is now on my no-buy list, along with banks.

[baldchap]

I've taken the view that the entire retail sector is suspect. The supermarkets have been for some time, of course. But Amazon is just taking market share from everyone. In the US major department stores are closing by the hundreds, shopping malls are struggling to find tenants and local shops are suffering too. Amazon already has same-day delivery to most locations and they will have 2-hour delivery at some point. Who is going to take an hour out of their day to go to the shops and buy something when you can have the item delivered to your home in 2 hours?

Every retail share I own (which fortunately isn't many) is down since I bought it whilst my Amazon shares are up 50%. OK, no yield so not a HY candidate. But the effects of Amazon could mean that no other retail share is either. Retail is now on my no-buy list, along with banks.

I concur, retail is no longer on my list. I am even reconsidering REIT's that are too heavy in retail premises.