Marc Bolland needs to give M&S some festive cheer In 1979, Adderley started selling curtains rejected by M&S at a market stall in Leicester. Today, that business, Dunelm, is worth £1.8bn, and Adderley is a billionaire. It was revealed on Thursday that Adderley has been putting that wealth to use by building a stake in M&S. Stock market filings show he has amassed a 3pc holding in M&S, worth almost £250m, making him its biggest private investor. The backing of a respected retailer is a vote of confidence for Bolland ahead of M&S's half-year results on Tuesday. These interim results are the first chance for the City to see the impact of the much-hyped revamp of M&S clothing - modelled by Huntington-Whiteley in the Christmas TV campaign. However, the results are not expected to be strong. The City's consensus forecast is that pre-tax profits will be down 10pc to £262m. This will include a 3pc rise in like-for-like food sales over the past three months, but a 1.5pc drop in clothing sales. Not one retail analyst across the City is predicting that clothing sales will rise, with forecasts ranging from a 0.4pc dip to a 2.5pc drop. On the face of it, this will ramp up the pressure on Bolland and suggest his plan to get British women spending more on his company's clothing is failing. It will also be a blow to the credibility of John Dixon, the head of the general merchandise division, and Belinda Earl, the style director, who have focused on improving the quality and style of M&S's womenswear. Earl has restored sleeves to the vast majority of M&S dresses after feedback from shoppers, while the company has also worked on sharpening the distinction between the plethora of sub-brands in its clothing division, such as Per Una, Autograph, and Indigo. However, for all the gloom that has surrounded M&S's clothing, shareholders do not appear alarmed. Shares in M&S have risen 30pc this year, more than double the wider rise in the FTSE 100 and treble Tesco's increase. So, if M&S is struggling so much, why are investors backing the company? One reason for the rise in the share price is takeover rumours. However, according to Adderley, now M&S's seventh biggest shareholder, "too big a deal" has been made of the challenges in clothing. "Look at the value of the brand," he told The Sunday Telegraph this weekend. He added: "The food is top- quality - now they need to get the same ethos into clothing." M&S, he explained, should receive "top marks" for the performance of its food operation. Adderley, who gave up day-to-day control of Dunelm in the 1990s, said he has had a face-to-face meeting with Bolland and the M&S chairman, Robert Swannell, since buying shares. "I got the feeling that Marc Bolland is a hard worker," he explained. If someone is working hard on the football pitch, you don't knock them. He is giving 120pc, what more could you ask for? The Dunelm founder said that Bolland is "laying foundations" for M&S with his strategy of investing in new distribution warehouses, bolstering the senior management team and revamping the website. "When his tenure is finished, there will be a great opportunity to take the building blocks and kick it on further," Adderley said. Bolland's investment plan for M&S is driven, in his own words, by a desire to evolve the retailer from a "traditional, British retailer" to an "international multi-channel retailer." This has been an expensive plan for M&S, with capital spending touching £800m this year. However, Bolland's three-year investment plan for M&S is due to finish at the end of March, when capital expenditure will drop significantly. For the 2014-2015 financial year, it is estimated to be just £550m. Unsurprisingly, investors are licking their lips at the prospect of M&S, which already generates significant amounts of cash, increasing shareholder returns as such expenditure drops. The company's balance sheet is also attractive because of the fact that M&S still owns a significant number of its stores. The retailer's last annual results show property, plant and equipment valued at £5bn. According to market sources, US funds are investing in M&S because they see the potential to extract more value from the retailer's property empire and its food business. When Bolland arrived at M&S in 2010, there were calls to spin off the food business because it was a drag on clothing. However, last month, Bolland told analyst and investors at a presentation on the food business that the company plans to open 150 more Simply Food outlets in the UK, half of which will be in transport hubs and half at locations with car parks on the edge of towns. It is also opening food-only stores in France and the Netherlands after its British delicatessen items flew off the shelves at its Champs-Elysees store in Paris. Food already accounts for 55pc of M&S sales, compared to 45pc for general merchandise. This share could increase further as M&S opens more stores and if the company continues to outperform the wider grocery market. "Food is increasing in strategic importance," Paul Rossington, retail analyst at HSBC, said: "We expect 2.5pc like-for-like growth in a market increasingly polarised between discounters, [such as] Aldi and Lidl and premium offers [such as] M&S and Waitrose. There is a 40pc overlap between food and GM (general merchandise) customers, and these shoppers are eight times more valuable than a single-category shopper. With all food stores operating as a collection point for online GM orders, a growing food network is now a key point of recruitment for GM. Simultaneously, a growing online GM business offers incremental food opportunities. The growth in the food business and the prospects of increasing dividends mean there will not be a queue of angry shareholders at Bolland's door when M&S posts its underwhelming interim results on Tuesday. Indeed, there are more frustrated noises emerging from shareholders in Tesco, which is suffering from being squeezed by discounters at the bottom end and upmarket Waitrose and M&S at the top. Despite success in food, so far Bolland has been unable to find M&S's place in the clothing market. Until he does, the questions over his performance will only grow louder. M&S is suffering a similar problem in clothing to Tesco in groceries. Sales have declined as the retailer has become lost on the high street between the low prices of Primark and the fast fashion of Zara. This is a major problem for Bolland because, although food is performing well, M&S's clothing arm is far more profitable than food when it is firing on all cylinders. The last annual results show that the company generated a 31.7pc margin on food, but a 51.8pc margin on general merchandise. Bolland, Dixon and Earl's drive to step up the quality of M&S clothing saw the new autumn and winter range - backed by a strong advertising campaign shot by Annie Leibovitz - win strong reviews from the fashion press. Indeed, even M&S's rivals accept that the retailer has upped its game. One senior retail executive said M&S's womenswear has "clearly improved." However, this improvement is yet to flow into the sales figures. This is partly because the half-year results due to be published this week cover the six months to the end of September, meaning that the full autumn and winter range was on sale for only one month of the period. Recent trading has also been disrupted by the unseasonal weather, with all fashion retailers disrupted by the mild weather in late September and October. With temperatures in the UK still comfortably over 10C, storms apart, many Brits are yet to get their winter coat out of the cupboard, let alone think about buying a new one. Indeed, new clothing data from Kantar suggests M&S may be making slow progress. In the 24 weeks to the end of September, M&S slowed the decline in its womenswear market share from 0.5pc in the previous period to 0.2pc However, Freddie George, analyst at Cantor Fitzgerald, is not convinced. "We continue to believe it will take a number of seasons before there is a marked improvement in performance in womenswear," he said. We are also not sure that the forthcoming Christmas TV advert with Rosie Huntington-Whiteley, Helena Bonham Carter and David Gandy will strike the right tone after the underwhelming Annie Leibovitz photo-shoot. M&S still has work to do on the availability of clothing in its stores. For example, there have been complaints among female shoppers about a shortage of a pink coat that is one of the centrepieces of the autumn and winter range. Half-empty clothes racks remain a common sight in stores. According to M&S sources, there is a "general acceptance" in the company and among investors that Christmas trading is vital this year if the retailer is to prove that clothing is making progress. For the future of Bolland, however, May 2014 is more likely to be judgment day. That is when M&S will report its annual results for the financial year. By then, Bolland's three-year plan to create an "international, multi-channel retailer" will be complete. The last major part of that plan is the launch of the new M&S website, which is being built using the company's own technology, rather than the Amazon platform it has previously used. At that point, investors and chairman Swannell will be in a position to judge Bolland and decide whether satisfaction with the food business is enough to offset any disappointment with general merchandise.