Dunelm founder Bill Adderley takes 3% stake in M&S

Bill Adderley, the billionaire founder of home furnishings retailer Dunelm, has spent £244m snapping up a 3 per cent stake in Marks and Spencer.

The holding, revealed by M&S in an announcement to the stock exchange on Thursday, sent shares in the high-street bellwether up more than 2 per cent to 503.5p.

Mr Adderley started selling curtains from a market stall in Leicester with his wife Jean in 1979 after quitting his job as a Woolworths store manager. The Adderley family owns about half of Dunelm, which has a market capitalisation of roughly £1.8bn.

People familiar with the situation said the holding was a private investment made by Mr Adderley, and not through Dunelm.

The holding of 48.5m shares - built steadily over more than a year - makes him the biggest private shareholder in M&S. The announcement was triggered by a share purchase taking him over the 3 per cent threshold.

Bankers and analysts suggested the stake was more likely to be a play on recovery at M&S, rather than a prelude to any corporate activity. Shares in Dunelm fell more than 1 per cent to 885p.

"I think its more likely to be a punt, but it's a very big one," said one analyst.

Neither Mr Adderley nor M&S would comment.

The holding comes as M&S prepares to unveil its interim profits and crucial like-for-like sales figures next Tuesday.

Marc Bolland, chief executive, has been battling to revive the store's womenswear sales, with new ranges and a high-profile advertising campaign.

Nevertheless, underlying sales of clothing and homewares are expected to fall 1.5 per cent in the three months to the end of September, according to a consensus of analysts forecasts, although M&S has a habit of outperforming market expectations.

"There has not been a lot of sign of a recovery yet," said Tony Shiret, a retail analyst. "If there was, you would start to see some big numbers coming through, and not a continued decline."

Mr Bolland is expected to point to an improving trend in clothing sales. He is also likely to say that while like-for-like general merchandise sales are still falling, the pace of decline has been arrested.

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According to the most recent figures from Kantar Worldpanel, the consumer research group, M&S held its overall clothing market share flat in the 24 weeks to the end of September.

In the crucial womenswear category, M&S's market fell 0.2 per cent in the 24 weeks to the end of September, compared with a 0.5 per cent decline in the preceding 24 weeks. Lingerie is thought to have also held steady, with menswear up.

The improvement in September came as the "Leading Ladies" advertising campaign hit publications, and the weather turned colder.

However, two people familiar with the situation said M&S's sales in October had been slower.

One analyst said the dull October made a strong performance in the crucial Christmas and new year period imperative. It could also raise questions about whether forecasts for full-year pre-tax profit would need to be trimmed from the current consensus of about £670m.

"With October running at a negative trend, you have got to go all the harder in November and December," he said.

Mr Bolland is also likely to point to the success of M&S's food business, with the consensus of analysts' forecasts for a 3 per cent increase in like-for-like food sales in the second quarter.

He is also likely to emphasise the potential from next year's switch from a website outsourced to Amazon to one run by M&S itself, and recent supply chain investments.

M&S is still expected to announce a 12 per cent fall in pre-tax profits in the six months to the end of September, from £297m to £262m.

"Bolland desperately needs to get profit moving up," said Nick Bubb, a retail analyst.

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