Marks And Spencer Share Discussion Threads

[mike_miikke] 27/2/2019 19:02

I wonder what Waitrose will be thinking about all this?

[mrfixituk] 27/2/2019 18:06

Do any retailers make a profit from online deliveries? I thought it was loss making. Ocado themselves haven't. The USP for them is technology. I don't think this will help much

[danny baker] 27/2/2019 16:58

I've closed my short today. Strategically I think the deal gets M&S out of a mess. Simply Food was touted as a great growth story 2 years ago and they even considered floating it off as a separate business. However Simply Food wasn't scalable profitably and rightly they halted expansion plans. Having a competent online offering will allow MKS to close dozens of stores and accelerate its transformation. Another nail in the coffin for the high street.

[philanderer] 27/2/2019 16:19

One thing is for sure .

If you were long MKS this morning at the open it has been a sh1te day.

[spob] 27/2/2019 16:15

" mks claim synergies of £70m by year 3 alone "

I don't beleive that for one minute

just my opinion though

[bor491] 27/2/2019 16:01

Debt is real though! tell that to the shareholders whose dividend has been halved and will be asked to pay an extra 700 or face dilution. It is very easy to spend millions when the money isn't yours!

[careful] 27/2/2019 15:46

the company has been reduced by almost £600m today because of a £700m deal.
great longterm potential.
mks claim synergies of £70m by year 3 alone.

markets are innumerate.

[suetballs] 27/2/2019 15:38

Bought a few this pm.
Suet

[loganair] 27/2/2019 15:37

If M&S had been with Ocado last year they would have made £34mln which means it will take them 22 years to get their original investment back...I do not call that a good investment by M&S.

[avidacre] 27/2/2019 15:34

We need a clear out of top management. Not pals together. Look a clothes, like a market stall. Food covered in plastic. All pasta - 90 %. No substance.

[spob] 27/2/2019 15:16

I confidently predict that MKS will never ever recoup the £750m paid out today, from selling groceries through Ocado.

I also predict that MKS will have to make further payments in the future to fund the building of new CFC's and to keep them maintained.

[philanderer] 27/2/2019 15:15

And yet the shareprice is still +8% for 2019.

[mike_miikke] 27/2/2019 15:11

Ocado should be paying M and S for the right to deliver... then M and S could pay a commission - percentage negotiable- on sales; so no up front cost!

[loganair] 27/2/2019 15:03

Is the Marks & Spencer and Ocado partnership just what shoppers ordered, or an expensive mistake?

Both brands have a focus on a quality shopping experience but experts have questioned how many M&S customers will be tempted to go online for their grocery shopping

Could the combination of two companies with very different pedigrees but a similar focus on quality be just what shoppers orders or an expensive mistake?

Too expensive?

Patrick O’Brien, research director at GlobalData, says M&S may have paid too much for a new joint venture with questionable benefits for shoppers.

The business would only have earned £34m last year, O’Brien points out, making M&S’ £750m investment look pricey.

But the deal offers a certain logic for a struggling department store chain. “M&S is under pressure to reinvent itself somehow, lest it be considered a retailer in perpetual, inevitable decline due to the shift to online,” says O’Brien, adding that he is not convinced this move is the right one.

To make it work, M&S needs to attract shoppers to Ocado’s platform while not alienating existing customers when Waitrose products are replaced by M&S ones; a “difficult sell”, says O’Brien.

He argues that M&S food shoppers typically buy small baskets rather than the £100+ average at Ocado. Many of M&S' customers that want online grocery shopping are already Ocado customers, he says.

“It may have overestimated the lure of M&S products, and indeed the questionable benefits of being able to order an M&S dress with a weekly shop.”

“Normally you’d expect picking, packing and transporting produce to amount to around 25-30 per cent of the cost of a single item, a cost that high margin retailers can absorb but low margin grocery cannot – unless everything is highly automated.”

M&S clearly can’t compete with the big supermarkets when it comes to customers' weekly shops, says Paul Mumford at Cavendish Asset Management, which holds shares in M&S.

He is also pessimistic about the deal, describing the £600m M&S is raising to pay for the new venture as an “extravagant use of shareholders' money”.

“The motivations behind this deal for M&S are clear, as the company has long struggled with an online offering that is not up to scratch.”

The benefits to M&S of an online food shopping are not certain because of the limited range of products it stocks, says Mumford. Consumers see it as a place to top up their weekly food shop with premium items, rather than somewhere for a large weekly shop.

[thegreatgeraldo] 27/2/2019 14:58

Correct me if I'm wrong, but M&S seem to already sell their high margin food (ready meals, prepared/processed stuff) online. The link with Ocado will allow them to sell lower margin grocery stuff like spuds & tea bags as well?

[raweden] 27/2/2019 14:55

The deal just smells of total desperation to me, a last roll of the dice.

[bor491] 27/2/2019 14:24

do Marks and Spencers own their stores or is it like Debenhams - rent them? If they mainly rent them I can't see how they're be able to save themselves with this huge debt load.

[porsche1945] 27/2/2019 14:21

another doggy struggling ftse 100 company with outdated business model, making desperate aquisitions, pity they changed management, has been worse under that idiot Norman. I wonder if its time just to ditch uk investments and buy asian em and us, anything on ftse just looks like an accident waiting to hapoen, hopeless.

[bracke] 27/2/2019 14:19

Net debt £1.78 Billion.

[loganair] 27/2/2019 14:17

The problem with M&S it has been poorly run since the mid 1990s.

[buywell3] 27/2/2019 14:15

CEO's can't help themselves from wanting to do big deals
Like the SBRY ASDA saga, where I warned 230p was coming months ago ... hit today

Amazon is coming bigtime soon to the UK

This MKS deal announcement will mean it won't want Ocado now, but it makes life easier for them taking these others down as they try to prepare themselves from the coming onslaught

events being dictated today for MKS as numbers have come out

buywell3 - 21 Feb 2019 - 12:13:58 - 8078 of 8158 MKS - MKS
buywell329 Nov '18 - 15:25 - 7833 of 7838 Edit

lots of lolly being thrown at this to try to stay over 300p

when the ammo runs out ... MKS numbers will dictate events

[bor491] 27/2/2019 14:07

This company has a debt load of over a billion if I'm not correct? Yet they screw shareholders with this cheeky move!!? Cutting dividend and a rights issue is a double slap on shareholders who won't take it lightly.