Marks & Spencer is among the leading risers in an uncertain market following the launch this week of its new website.
Its shares have added 8.2p to 504.5p as analysts at Jefferies issued a positive note on the retailer, moving their recommendation from hold to buy and their price target from 480p to 600p. Analyst Caroline Gulliver said:
We believe M&S' website is now industry-leading, with daily editorial inspiration. This development, together with improving UK consumer confidence and an increasingly supportive pound/dollar rate, leads us to increase our earnings per share estimates for 2015 and 2016 by 3% and 5% respectively.
M&S' long-awaited new, and custom built, website was unveiled yesterday and, in our minds, it is impressive. The customer interface is significantly improved with more video content, 50% bigger pictures and a streamlined look. The addition of the magazine-esque "Style & Living" section which includes daily editorial content including key outfit looks should appeal to M&S' customer base, many of which are time-rich and online
[There are] hopes build for a turnaround in General Merchandise sales and profits. Though M&S' track record for sustainable sales and profit growth is undeniably patchy, we believe the combination of an improved website, an improved delivery offer (to come), a quality product range at attractive prices, improved UK consumer confidence, supportive foreign moves and good operating expenses control should lead to a step change in M&S' operating performance.
But retail analyst Nick Bubb was more cautious on the prospects:
M&S has at last re-launched its online site and moved off the legacy Amazon operating platform. We've noted before that the fastest growing online demographic is the M&S core older woman customer, but M&S has been badly handicapped by a poor website, so if it gets it right this is a big opportunity. However, we note the comment on the Drapers website that "users may get too distracted by too much content and spend more time on this than they do spending money on the site". M&S clearly face lots of competition and need to have attractive product and the Daily Mail flagged yesterday that, although the new spring range has generally had a good press, some people still think it's too young and too expensive.
