Marks & Spencer partners with Zalando and Sephora

Marks & Spencer, a British retailer with approximately €20 billion in revenue, is implementing a strategic partnership with Zalando to handle online orders, warehousing, and returns across 22 countries. The collaboration aims to reduce costs for the retailer. Additionally, LVMH's beauty brand Sephora will enter M&S stores starting in spring to attract younger customers, as M&S currently holds only about 1% market share in beauty. The company has seen food sales grow by 16% this summer, compared to 2% for Tesco, and its stock has doubled over 15 years. M&S is valued at nearly €10 billion, or 12 times expected earnings, with a 1% dividend yield. UBS analysts project M&S could achieve over 12% margins by 2029 if clothing margins recover to over 10%, though current adjusted operating margins are around 5%. UBS analysts argue that M&S's valuation could be interesting if food market share gains continue and clothing margins recover.