LONDON (Bloomberg) — Marks & Spencer Group Plc, the UK’s largest clothing retailer, yesterday reported its highest first-half profit in nine years, sending its shares to a record close.Net income for the six months ended September 30 rose 32 percent to $281.3 million ($535.6 million), or 16.5 pence a share, from $212.6 million, or 12.7 pence, a year earlier, the London-based company said in a statement. That’s the biggest first-half profit since fiscal 1998.

Sales at stores open at least a year rose 6.4 percent in the fiscal second quarter, a fifth straight gain after seven quarters of decline. That beat analyst estimates.

Chief executive officer Stuart Rose, who returned to the retailer in 2004 and thwarted a takeover plan by billionaire Philip Green, has redesigned women’s wear and increased advertising to win back shoppers. Green’s Bhs Group Ltd. and Next Plc are losing customers to Marks & Spencer.

“Philip Green must be grinding his teeth today,” said Nick Bubb, an analyst at Evolution Securities in London. “In clothing, they are taking market share off Next.”

Marks & Spencer, which has a store in Hamilton operated by TESS Ltd., said same-store sales of clothing and home furnishings rose 7.9 percent in the second quarter after it introduced advertisements using models Twiggy and Elizabeth Jagger and began remodelling its stores. Same-store food revenue climbed 4.7 percent in the quarter. The company sells foodstuffs at both its Marks & Spencer and Simply Food outlets.

The shares jumped 41.5 pence, or 6.3 percent, to 698 pence in London, the highest ever.

The percentage gain was the steepest since Green’s $9.1 billion bid attempt in 2004. The stock has risen 38 percent this year, taking the increase to 94 percent since Rose was appointed to his current position in May, 2004.

“The turnaround has been quite remarkable,” said Henk Potts, a fund manager at Barclays Stockbrokers in London, which manages $45 billion.

“They’ve done a fabulous job in terms of reformatting the stores, rejuvenating the brand and reaching out to a younger generation.” He said his firm had a target price of 722 pence before yesterday, and were “buyers” of the stock.

Best-selling products for the autumn included a red jersey dress worn in an advertisement by Elizabeth Jagger, daughter of Rolling Stone Mick, that sold for 35 pounds, Rose said on a conference call. “It flew out so fast we never saw it,” he said.

The retailer reduced prices by five percent on average during the fiscal first half and has obtained more clothing from Asia, where production costs are lower. It opened a buying office in Shanghai and plans another in Delhi in the second half, adding to operations in Bangalore, India, and Hong Kong.

Rose has declined to describe Marks & Spencer’s performance as a “recovery” since he was brought in to turn around the company that first employed him as a trainee in 1971. His first task was to fend off Green, who was unable to get the support for his 400-pence-per-share bid from the retailer’s board.

“This quarter we’re in now is very important,” Finance Director Ian Dyson said in an interview today. “If we deliver, we may be able to use the ‘recovery’ word.”

Less than two months after his arrival in 2004, Rose declared the company’s brands were perceived as “aloof, formal, middle class and a touch boring”.

Marks & Spencer stock fell for five of six years through 2003. Profit slid 54 percent in 1999 alone as the company lost customers to Next and Sweden’s Hennes & Mauritz AB.

Marks & Spencer reversed its sales drop even as competition from Tesco Plc and John Lewis Partnership Plc’s department stores held back revenue at rivals Debenhams Plc and Next.

Same-store sales at Next’s clothing chain unaffected by nearby openings fell 7.5 percent in the six months to July 31. Same-store sales at Debenhams gained 0.5 percent in the year ended September 2. Debenhams and discount clothing seller Matalan Plc have complained unseasonably warm weather in September hampered sales of autumn clothing, such as coats and sweaters.

Marks & Spencer said its share of the UK clothing market climbed by 0.9 percentage point s to 10.1 percent in the 24 weeks ended Sept. 17. It gained in “all product categories”, including a gain in women’s wear to 10.5 percent from 9.4 percent.

Rose said he’s appointed John Dixon, his executive assistant for the past two years, as director for e-commerce.

Online sales at Marks & Spencer are $100 million and the CEO wants to raise that to $250 million in “the next couple of years.”