Bill Adderley unmasked as Marks & Spencer's biggest private shareholder

Billionaire founder of homeware chain Dunelm built £250m stake in M&S during 18-month period in which shares rose by 40%

Bill Adderley, the billionaire founder of the homeware chain Dunelm, has secretly built a near £250m stake in Marks & Spencer, it has emerged.

The entrepreneur acquired the shares during the past 18 months, a period in which the M&S share price has risen by almost 40%.

The disclosure, triggered by stock market rules that unmask shareholders who own more than 3% of a company, revealed Adderley as M&S's largest private shareholder. He will receive dividends on his stake of more than £8m a year.

An M&S insider said: "We do know him and have met him, being as he has been our largest private shareholder for some time. It was a small purchase [that took Adderley over the 3% disclosure threshold] so this has not come out of the blue."

Adderley founded Dunelm on a Leicester market stall with his wife Jean in 1979 after leaving his job as manager of Woolworths in the city, eventually floating the business on the stock exchange.

The business is now worth about £1.8bn and boasts more than 100 stores making sales of £677m and profits of £108m. It is still majority owned by the Adderley family, who live near Uppingham, Rutland, and are collectively worth £1.1bn, according to the 2013 Sunday Times Rich List. Shares in Dunelm have more than doubled since the financial crisis and risen by about 30% during 2013.

Adderley, who has avoided the public spotlight, was not available to comment but sources close to the family suggested he had merely spotted an investment opportunity and taken it. When asked if he was planning to lead a consortium to bid for control of M&S, the source said: "This would be an extraordinarily clumsy way of going about it."

The news that M&S has attracted such a large private shareholder comes at a propitious time for the retailer, which has struggled to impress the City under the leadership of chief executive Marc Bolland.

The Dutchman is in the final year of a three-year, £2.3bn plan designed to address decades of under-investment. His efforts were insufficient to prevent clothing sales falling for eight straight quarters, although this week it emerged that M&S has stemmed the erosion of its share of the clothing market – albeit while suffering continued declines in its share of the women's clothing market. It is due to report its half-year figures next week.

Efforts to repair flagging clothing sales and pull in younger shoppers have also been knocked by the imminent departure of Gillian Ridley Whittle, development and buying director for womenswear, which was announced last week.

Next week M&S is expected to report a 1.5% fall in underlying sales of general merchandise – a category mainly made up of clothing – for the six months to the end of September. That would be on a par with the 1.6% slide reported in the three months to the end of June. Some analysts have downgraded their sales expectations amid unseasonably warm autumn weather.

The retailer is also launching its Alice in Wonderland-inspired Christmas adverts, featuring actor Helena Bonham Carter and models David Gandy and Rosie Huntington-Whiteley.

M&S shares added 2.09% yesterday to close at 503.5p. Adderley's 48.5m shares are therefore worth £244m.

City analysts have a mixed view on the shares. Of the 23 following the company, 11 rate the shares as a buy, seven as a sell, while five are neutral, according to the financial website Digital Look.

Nick Bubb, an independent retail analyst in London, told Bloomberg: "He's brave to take such a big punt on an M&S recovery."

Recent M&S successes have included its food business - Bolland's area of expertise, having joined from the grocer Morrisons - that has enjoyed 17 consecutive quarters of underlying sales growth and contributes 54% of group sales. Meanwhile, online sales growth is running ahead of the market and solid progress has been made overseas.

Article Source : http://www.guardian.co.uk
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