Marks & Spencer’s lack of street-wise expertise was cruelly exposed last week. Its profit warning dumped the shares into a pre-season sale, and with the price now at its lowest for three years, its lack of financial flair mirrors that of the clothes.

A year ago it embarked on a £150m share buyback programme, which unkind souls might now describe as reverse insider trading – you know things are going badly, but keep buying anyway. At prices as high as 543p, the company bought in shares which now cost 390p.

Not for the first time, the contrast with rivals Next is a painful one. Last year its shares touched £80, a price far beyond what CEO Simon Wolfson considered a sensible use of his company’s money. He suspended his long-running buyback programme and paid a special 230p a share dividend instead.

This year, after a decidedly unfashionable matching pair of profit warnings, Next shares have slumped. This fall produces what Lord Wolfson  somewhat contrarily described at the results as “favourable conditions”, the point where buying the shares back beats the 8 per cent equivalent return target for new investment in the business. That price is currently £69.62.

With the shares at £55, the reaction to such a collapse from many company managements would be to suspend the buyback programme, perhaps citing “unfavourable conditions”. Next has stuck to its guns. Nick Bubb, the doyen of retail analysts, dubs Lord Wolfson “Mr Buyback man” for the £75m (of £150m) spent so far.

Lord Wolfson could go further to consolidate his family’s grip on Britain’s most successful clothes retailer. Next has just raised £300m, paying 3.625 per cent for 12 year money, but in such a highly geared industry, too much debt is dangerous.

As with M&S, there is no sign of similar intellectual rigour at Burberry, which has served notice of a £150m (that sum again) share buyback, warning of tougher times but saying nothing about a target price. Burberry’s current management lacks the trust that Lord Wolfson has earned, and its buyback looks like a displacement activity to pacify nervous investors.

Perhaps Burberry will enlighten us before wading into the market. Otherwise, like some of its less well-heeled customers, it will look like a case of carry on buying until all the money is gone.


You are the bursar at an Oxford college. You need more accommodation for the undergraduates, and have you seen the price of houses in Oxford? The answer, since you happen to have a suitable plot, is DIY, or rather, finance it yourself. Our college has just raised £35m over 45 years at 3.37 per cent, which will be comfortably covered by the rents from the building.

The puzzle is why this is unusual, when dirt cheap finance is available and when we need more housing. You may not own a convenient plot, of course, but there is far more land with planning permission than is being built on. Construction is sluggish because small housebuilders were cut down by the last recession and ever-increasing regulation, while it is hardly in the interests of the big groups to expand too fast.

The picture may be bleaker than Brandon Lewis, the housing minister, keeps claiming. Daniel Bentley, the editorial director of Civitas, the think tank, cannot make the sums add up. Mr Lewis boasts that 181,000 homes were built last year. Well, yes, if you include 20,650 from change of use, 4,950 by subdividing existing homes, and exclude the 10,610 that were demolished, some to make space for new ones. Not quite 181,000 homes “built”, then.

Oh Benny, say it ain’t so!

Benny Higgins was the man who spotted the overheating housing market in 2007. As boss of the Halifax, a leading mortgage lender, he  raised the bar for borrowers. When, inevitably, Halifax lost market share to others like the soaraway Northern Rock, his bosses at HBoS fired him. Sadly, his admirers among us have now suffered a great disappointment. Despite earning £2.2m for running Tesco Bank, it seems that Mr Higgins has been stretching the definition of reasonable expenses with his taxi bills, clocking up £18,000 in eight months. O tempora! O mores! Oh Benny!

This is my FT column from last Saturday, before the Bank Holiday got in the way