M&S has struggled with declining profits recently which have sent shares tumbling

M&S has struggled with declining profits recently which have sent shares tumbling

Marks & Spencer is reportedly set to drop out of the FTSE100 index of Britain's biggest listed companies later today (4 August) – a move that would mark the first time the retailer has not been a member since the index launched in 1984.

Based on the closing price of its stock on Tuesday (3 September), its market value has fallen below the threshold for inclusion.

According to the BBC, the official announcement will not be made until later today (4 September) with the decision implemented on 23 September.

M&S has struggled with declining profits for some time now, and the company's share price has fallen more than 40% over the past three years.

In May the retailer revealed plans to shutter a further 85 full-line stores as full-year profit in the year to 30 March fell 9.9% to GBP523.2m (US$663.1m) from GBP580.9m a year earlier. UK clothing and home sales were down 3.6% over the year, impacted by store closures, with like-for-like revenue down 1.6%. Gross margin, however, was up 20bps, driven by 14% lower stock into sale. 

This followed an announcement in January that it was to close 17 stores with the loss of more than 1000 jobs.

A spokesperson for the company told just-style today it had no updated comment – but when asked about the FTSE move at the firm's full-year results presentation, chairman Archie Norman said: "We fell out of the FTSE when I was at ITV and the sky didn't fall in. It was the same business the next day."

The company is in the midst of a long-term transformation of the business, tackling legacy issues and trying to return the business to sustainable, profitable, growth.

"M&S falling out of the FTSE 100 is a symptom of its continual decline, and its inability to cope with the changes in the way people shop, namely the switch to e-commerce," explains Patrick O'Brien, UK retail research director at GlobalData.

"It hampered itself with long leases on stores which turned unprofitable, and so the cost of closing stores was high, and began too late. While it has a (very costly and risky) strategy in place in online food with its joint venture with Ocado, its market share decline in clothing and general merchandise has not been arrested."