LONDON (Reuters) - British retailer Marks & Spencer MKS.L has appointed the chief executive of rival Tesco's TSCO.L F&F Clothing division to be the boss of its struggling clothing and home business, it said on Friday.

FILE PHOTO: A view of a Marks and Spencer shop in Singapore December 14, 2018. REUTERS/Edgar Su/File Photo

M&S, one of the best known names in British retail, said Richard Price, 52, would re-join the group as managing director, clothing & home next year.

The appointment sent shares in M&S up 2.7% by 1540 GMT, paring losses over the last year to 33%.

Earlier this month M&S reported a 17% drop in first-half profit, dragged down by falling clothing sales, but said it was confident it could fix its problems and return to growth.

In July, M&S’ CEO Steve Rowe sacked clothing division head Jill McDonald after publicly criticising poor availability, and assumed direct leadership of the business himself.

Price started his career at Next NXT.L before working for M&S from 2005 to 2012. He was head of merchandise, before being promoted to menswear trading director in 2008.

He left M&S to become managing director of department store chain BHS and joined Tesco, Britain’s biggest retailer, in 2015, growing F&F’s annual revenue to over 1 billion pounds ($1.3 billion).

“I left the business because I felt it was drifting in the wrong direction but now feel we have a real chance to make it special again,” said Price.

“The new team has already started to improve product and value and I am looking forward to working with them.”

The job is one of the biggest in British retail.

In its 1990s heyday, M&S was the go-to British high street destination for clothes, selling everything from party dresses to suits and underwear.

In 1997, it became the first UK retailer to make an annual profit of 1 billion pounds. But while the 135-year-old group remains Britain's largest clothing retailer in sales terms, it has been squeezed by the likes of Inditex's Zara, H&M, Primark ABF.L and the supermarkets' clothing businesses.

M&S said Price’s start date “will be confirmed in due course”.

But it may have to wait if Tesco hold Price to the notice period on his contract and place him on “gardening leave”. Tesco declined to comment.

In October last year, M&S recruited George Wright from Tesco to be its new food commercial director but he did not start until April this year.

McDonald departed M&S after less than two years in the job. She was named as Costa Coffee's KO.N new CEO on Wednesday.