Marks & Spencer is set to make a triumphant return to the FTSE 100 after four years of absence, showcasing its remarkable turnaround in the retail industry.
Joining the blue-chip index alongside Diploma, Hikma Pharmaceuticals, and Dechra Pharmaceuticals, Marks & Spencer’s return has been officially confirmed by FTSE Russell, the index compiler.
Effective September 18, these new additions will replace Persimmon, Abrdn, Hiscox, and Johnson Matthey.
This year, M&S stocks have soared by nearly 77%, a testament to the leadership of CEO Stuart Machin, who has successfully steered the retailer away from the fate experienced by collapsed department stores like Debenhams and House of Fraser.
In a LinkedIn post, Machin shared, “Good news for M&S today, and it’s a reflection of everyone’s hard work – but the sky didn’t fall in when we left the FTSE 100 four years ago, and it doesn’t change our priorities today. To be frank, it’s just another day, and we’re only as good as our customers shopping with us today tell us we are. That’s what matters, and if we do right by our customers, we’ll do right by our shareholders.”
Marks & Spencer was among the founding members of the FTSE 100 in 1984 but was downgraded to the midcap FTSE 250 in 2019 due to slumping sales and a decline in share price.
Since then, the company has undertaken a long and awaited recovery journey, which involved the closure of over 100 underperforming stores as part of a 10-year restructuring plan. Additionally, Marks & Spencer started selling third-party brands alongside its own products.
During the pandemic, the company experienced a resurgence in popularity, driven by online sales. M&S made significant efforts to enhance its e-commerce operations, which paid off and aided in attracting more shoppers.
This marks the second time that Abrdn has been ousted from the FTSE 100 within a year. The Edinburgh-based asset manager has been hit hard by high inflation and interest rates, resulting in reduced demand for their advisory services. Their share price has plummeted by nearly 30% in the past six months.
Meanwhile, Persimmon’s departure from the FTSE 100 comes amidst a worsening property sector due to high mortgage costs. The housebuilder has witnessed a 28% decline in share price over the past year.
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