European Shares End Flat as Fed Fears, Virus Concerns Weigh

The pan-European STOXX 600 index closed largely unchanged at 471.79 points, following a selloff last week that knocked it off record levels.

Commodity-linked sectors continued to outpace the general market, as oil and metal prices rose on expectations of a recovery in major importer China.

Basic resources stocks were the best performers for the day, rising 2.0%.

Travel stocks also surged nearly 2% after U.S. health regulators granted full approval to the COVID-19 vaccine developed by Pfizer Inc and BioNTech SE in a move that could accelerate U.S. inoculations.

Global stocks wobbled last week after data from U.S. and Asian economies signalled a slowing global economic recovery, as a spike in the Delta variant of the coronavirus prompted fresh restrictions in several parts of the world.

Investors are awaiting U.S. Federal Reserve chief Jerome Powell’s speech at the annual Jackson Hole symposium on Friday for hints on the central bank’s asset purchases tapering plans.

“Since the release of the Fed minutes last week, the consensus for the start of tapering has moved slightly forward, from the beginning of 2022 to December 2021,” Unicredit analysts said.

“A hawkish surprise from Jackson Hole appears less likely and the next topic of major relevance is probably the U.S. labour market report on Sept. 3.”

Meanwhile, German stocks rose 0.3% as data showed Germany’s gross domestic product grew by 1.6% on the quarter from April to June, slightly up from its previous estimate of 1.5%, helped by private consumption and state spending.

Marks and Spencer Group rose 4.1% after Berenberg and Credit Suisse raised their price targets on the UK retailer’s stock.

“Despite it being a moderate environment for UK consumption…, M&S is enjoying favourable positioning, market share gains from peers disappearing,” Credit Suisse analysts said in a note.

Norwegian salmon farmer Bakkafrost gained 1.9% following its second-quarter results.

Novartis slipped 1.7% after the Swiss drugmaker said its Kymriah CAR-T therapy did not meet the primary endpoint in a late-stage study.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Mark Heinrich)

M&S to Shut a Third of Core Store Estate Over a Decade

By James Davey

The British retailer, in the midst of its latest turnaround attempt after decades of failed reinventions, has closed or relocated 59 such “full line” stores over the last three years, leaving it with 254.

Its new target is to have a fully modernised core of about 180, in addition to its chain of food-only stores.

CEO Steve Rowe said that would be achieved by “rotating the estate” at 110 locations. About 35 full line stores will be relocated, about 45 will become food stores and about 30 sites will be exited over a ten year period, he told reporters after M&S published 2020-21 results.

“The market dynamics have changed and the effect of the pandemic means that we need to move faster,” Rowe said.

“The good news is that there has rarely been a better time to acquire new space.”

Rowe said M&S has 17 new or extended full line stores in planning, including six former Debenhams sites, in the next two years.

Debenhams collapsed in December, with its last stores closing earlier this month.

To help fund the store estate plans, M&S plans to raise at least 200 million pounds ($283 million) by redeveloping freehold and long leasehold stores, including its flagship Marble Arch store in central London.

“We’re committed to stores and believe they could be a true source of competitive advantage, but they do need to be the right stores in the right location with the right services and they have to work with online,” added Rowe.

M&S estimated the cash costs of the programme at about 260 million pounds.

($1 = 0.7066 pounds)

(Reporting by James Davey. Editing by Mark Potter)

Britain’s M&S Promotes Food and Strategy Bosses in Top Team Shake-Up

By James Davey

M&S said Bickerstaffe and Machin will become joint chief operating officers, reporting to Rowe who has been CEO since 2016.

Machin, whom media reports had linked with the CEO’s job at supermarket Asda, will continue as managing director of food but also oversee operations, property, store development and IT.

Bickerstaffe will oversee the data, services, clothing and home and international businesses.

If Bickerstaffe does eventually take over from Rowe she would become M&S’s first female boss in the group’s 137-year history.

M&S said finance chief Eoin Tonge will also take on strategy and transformation planning, while Sacha Berendji, currently retail, operations and property director, will move to focus on the future of the retailer’s store estate.

Richard Price and Paul Friston will remain as managing directors of clothing and home and international respectively.

“Stuart and Katie will bring even more impetus to our core businesses,” said Rowe.

“With that I will, with Eoin’s support, be better able to concentrate on building the M&S of the future and our path to growth.”

After decades of failed turnaround attempts, Rowe and chairman Archie Norman have attempted to transform M&S’s culture, closed stores, increased the use of technology and improved product and value to broaden the retailer’s appeal.

But M&S was still struggling to reinvent itself before the pandemic hit.

A year ago it said the crisis would indelibly change its business and it would speed-up its latest plan, delivering three years of change in one.

In August, M&S cut 7,000 jobs and in November it reported the first loss in its 94 years as a publicly listed company.

Full year 2020-21 results will be published on May 26.

(Reporting by James Davey; editing by Jason Neely, Kirsten Donovan)