- Short-selling of Marks & Spencer shares has soared to a record high
- Short positions reached almost 17 % of Marks & Spencer’s stock last week
- The shorting followed a shock profit warning at M&S’s biggest rival John Lewis
Short-selling of Marks & Spencer shares has soared to a record high with hedge funds having placed a collective £800 million bet on a slump in the price.
Short positions – contracts that allow speculators to gamble that the value of a business will fall – reached almost 17 per cent of Marks & Spencer’s stock last week.
The shorting followed a shock profit warning at M&S’s biggest rival John Lewis, owner of Waitrose. Hedge funds taking a punt on a fall in the price of M&S include Marshall Wace, Pelham Capital and US-based Lone Pine Capital.
Gloom: Short-selling of Marks & Spencer shares has soared to a record high with hedge funds having placed a collective £800 million bet on a slump in the price
Archie Norman was installed as M&S chairman last September and has been trying to orchestrate a revival in the company’s fortunes.
The retailer, which releases its next trading statement at its annual meeting on July 10, plans to close a third of its clothing stores by 2022. There are fears that poor trading will continue over the summer.
The high street as a whole is being forced to slash prices due to competition from online retailers coupled with weaker consumer confidence.
The rise in short positions puts M&S second only to beleaguered department store Debenhams, which is the most shorted retail stock.
There are short positions over nearly 18 per cent of the company’s shares, according to IHS Markit figures.
Debenhams announced a profit warning a fortnight ago.
The alert was its third this year and coincided with a massive restructuring at House of Fraser that will see more than half of its stores axed, including its prestigious flagship branch in Oxford Street.
Marks & Spencer is currently ranked 98th in the blue-chip FTSE 100 list of Britain’s largest firms.
If poor trading leads to a further slide in the shares, the retail giant could soon find itself fighting relegation from the elite share index.