British high street chain Marks & Spencer (M&S) is in talks with Ocado to form a...
LONDON - British high street chain Marks & Spencer is in talks with Ocado to form a joint venture that would give M&S a full online food delivery service for the first time, sending shares in both companies surging on Tuesday.
“We believe the food of M&S is perfectly suited for this more upmarket convenience shopping,” said Bernstein analysts in a research note. “We would be wary of the ability for the M&S brand to support a basket size of the magnitude required to make the online economics work ,” Jefferies analysts said in a research note.For Ocado, however, analysts said news of the talks was a relief following a devastating fire this month at its flagship robotic distribution center that hit its shares.
While the focus on technology has boosted its share price, the deal as mooted with M&S would enable Ocado to keep a stake in its British retail business rather than selling it completely to focus on tech deals.
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