The Marks & Spencer (LSE: MKS) share price has fallen from grace this year. The stock has produced one of the worst performances of all UK shares year-to-date.
At one point in May, it was off more than 60% from its 52-week high. Since then, shares in the retailer have recovered. The stock is now down just 36% for the year.
Following this performance, the Marks & Spencer share price looks cheap compared to history. But I’m not interested in buying the shares at this level. In fact, I believe there’s a whole range of other cheap UK shares that may be better long-term investments.
Marks & Spencer share price setbacks
Marks is one of the UK’s most storied retailers. However, over the past decade, the group seems to have lost its way. The firm, which was once revered for its quality clothing, has let standards slip. In my opinion, management has spent too much time and effort trying to diversify into food. They’ve neglected the clothing business. As a result, sales have suffered.
While growth at the food division has helped offset some of this slump, I can’t help but think that if management had focused on improving the clothing business, the decline wouldn’t have materialised in the first place.
The company’s lack of direction is the main reason why I’m planning to avoid the Marks & Spencer share price for the foreseeable future. The stock looks cheap, but I think it’s cheap for this reason. As such, I’m not convinced the investment will ever be able to recover this year’s losses.
According to my research, there are plenty of other UK shares with more attractive outlooks than the Marks & Spencer share price.
These include retailers JD Sports and Next. Both of these companies have succeeded where Marks has failed, in my opinion. JD has remained focused on what it does best. That is seek out and offer for sale the best footwear on the market for its customers.
Meanwhile, Next knows it doesn’t have a definitive edge in one market or another. So management has concentrated on improving the group’s customer offering. The company has invested hundreds of millions of pounds in infrastructure to improve the customer experience and Next’s e-commerce offering.
By focusing on what it does best, I think the group’s share price will outperform Marks & Spencer’s in the long run.
Even though both companies might look more expensive than Marks after the group’s recent performance, I believe it’s worth paying a high price for a quality business, rather than a low price for a struggling business.
There’s no point buying something cheaply if it’s just going to become cheaper. And I think that could happen with the Marks & Spencer share price, based on its performance over the past decade.
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