Rocky ride for M&S shares

The generally downwards trajectory of Marks & Spencer's share price over the past 18 months reflects the company's struggle to re-invent itself.

Trading statements, resignations, new appointments and a store-full of image makeovers have all contributed to mini-peaks and deep troughs on the graph.

Share milestones

Peak of 664p in Oct 97

10-year low of 170p in Oct 00

Closed at 249p Tuesday

However, despite its best efforts, the retailer has not managed to return to its high of 664p in October 1997, which came in the days when its profits topped £1bn.

During the past two years, profits and sales have tumbled in an increasingly competitive UK retail environment.

Trough

Three years after the peak in 1997, the shares hit a 10-year nadir on 20 October 2000, closing at 170p. They had already breached the psychological 200p mark on 3 October.

The sell-off began earlier that month after SG Securities, Credit Suisse First Boston and BNP Paribas all trimmed their earnings forecasts for the retailer.

The downgrades followed a weak September trading statement and reflected serious concern about the ability of the store's new management team, under chairman Luc Vandevelde, to turn around the troubled retailer.

Mr Vandevelde, a Belgian national, had been brought in on a two-year contract in January 2000, with a £2.2m golden handshake.

Managing change

The main problem for M&S has been proving that there will be changes for the better from the shake-up in its management team.

The company announced in September it was appointing Roger Holmes, from Kingfisher, to be its head of UK retail.

But September also saw the departure of the former chief executive Peter Salsbury and two other directors. During Mr Salsbury's stewardship of two years, the retail giant's profits had halved.

Mr Vandevelde took on Mr Salsbury's post, demonstrating a personal commitment to improving productivity, but also reminding investors of the oft-uncomfortable period when Sir Richard Greenbury held both chairman and chief executive roles.

The retailer has since announced a series of measures, including an image makeover, to halt its decline.

In February, M&S also hired George Davies, who successfully built up clothing chain Next and the George range of clothing at Asda, to launch a new womenswear collection.

On the day his appointment was announced, the shares jumped 7% to 240p.

January sales

Nevertheless, in its most recent sales statement on 23 January, the company unveiled yet another disappointing set of Christmas trading figures.

Overall sales fell by 5.1%, with the biggest falls coming in traditionally strong areas such as women's clothing and menswear.

But, because analysts were expecting the worst, the shares actually rose almost 3% to 205.5p as investors sighed with relief.

Job cuts

The company's latest announcement to close European stores and cut up to 5,000 jobs propelled the shares up 7% to 266.5p by Thursday's close.

This is their highest level since June 2000 and represents an improvement of more than 45% since they hit their low last autumn.

Certainly Thursday's restructuring raises hopes that the company has turned the corner under the helm of the ever-optimistic Mr Vandevelde.

And in the meantime shareholders may be able to look forward to a pay-out of about 75p per share, if the company goes ahead with the £2bn handout announced as part of the revival package.