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Review Thursday, 28 December, 2000, 18:04 GMT
Britain's battered blue chips
Some of the UK's long established corporate stars came unstuck in spectacular style in 2000.

British Telecom, British Airways and Marks and Spencer have spent years, if not decades, brushing aside domestic competitors and being held up as examples for the world to follow.

But as they approach 2001 the three are in the midst of dramatic shake-ups which they hope will reverse their declines.

The most spectacular decline at the start of the year was British Airways, whose share price plunged from 420p to 260p in the first quarter of 2000.

That decline accelerated a fall seen in earlier years, and prompted the axing of chief executive Bob Ayling from his post in March.

British Airways share price

Mr Ayling's term at the helm will be remembered best for his decision to scrap BA's traditional colours and paint abstract designs on its aircraft tailfins. These were intended to illustrate its global reach.

He was also leading the airline at a time marked by industrial unrest and a pilots strike.

His replacement, the Australian Rod Eddington, arrived with a successful, no-nonsense record in aviation, and has set the airline on a completely different path.

The low cost airline Go is to go, while British Airways operations at Gatwick are to be largely concentrated at Heathrow. The proposed merger with KLM was also dropped.

Former trailblazer

The markets have yet to be convinced that he has found the formula to turn BA back on course, with its shares rising, falling back and then recovering again in the last four weeks of the year to levels near those at which 2000 began.

The picture at another of the trailblazing privatised companies in the UK, British Telecom, has proved even worse.

The company has been attacked from all sides, and was suffering even during the tech stock "bubble" in the first three months of 2000.

BT's share price
Since then it has dug itself into a huge pile of debt as it bid for the licences to operate third generation mobile licences.

It has been relentlessly blamed for dragging its feet in opening its networks to competitors, and in doing so stifling the growth of low cost unmetered internet access.

Even worse, it has had to watch flat footed as its once small time UK rival, Vodafone, grew to become the biggest mobile telecoms company in the world.

Debt burden

British Telecom retains Sir Peter Bonfield as its chief executive, and has come up with a recovery strategy based around the spinning off or partial flotation of divisions such as BT Cellnet and Yell, its online directory.

Thus far the markets have been little impressed by these moves, and are spending more time wondering how the mounting debt pile is to be tackled.

Once similarly dominant, clothing and food retailer Marks & Spencer had ruled the UK's High Street for decades, seemingly unchallenged for quality, value and ability to give British people what they want.

Its decline was spectacular in 1998 and 1999, but hopes were high that it would get back on track in 2000, with the poaching from France of new chairman Luc Vandevelde.

M&S share price
Confidence in the new appointment provided an early boost of the M&S share price, which rose more than 20% by March.

The arrangement whereby chief executive Peter Salsbury remained in post, alongside the new man, did not last the year.

Measures to halt the slide ranged from new up market clothing ranges, to the historic move into advertising.

Unfortunately these measures have yet to bear fruit - indeed its sales seem to have fallen further in the period since its first television advert was broadcast.

The markets are expected to judge M&S ruthlessly if the tading update after Christmas fails to give any signs of a change in fortunes.

Like its rivals BT and BA, Marks will be hoping to rediscover that special something in 2001 that made it a world beater.

Top business stories of 2000 from UK and abroad

Top UK stories

Stories from abroad

World stock markets
See also:

06 Dec 00 | Business
23 May 00 | Business
18 Sep 00 | Business
07 Nov 00 | Business
22 Oct 00 | Business
30 Nov 00 | Business
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