It is his first major corporate role since leaving the UK retail sector 18 months ago, when he stepped down as chairman and chief executive of M&S after six years at the helm. The announcement on Sunday ends months of speculation over the retail veteran’s plans.

In March, Sir Stuart told The Sunday Telegraph he “did not believe in retirement” and would consider another major chairmanship of a FTSE 100 company.

Blue Inc, which sells brands such as Boyz Stuff and Ben Sherman, is privately owned but the move will enable Sir Stuart to continue working in the retail sector, where he has spent his whole career to date.

Sir Stuart invested a “modest” amount of his own money last year in Blue Inc, according to the company, which has 191 stores and a 2,000-strong workforce. Fellow investors include the billionaire Reuben Brothers.

The company is led by managing director Steven Cohen and is on track to deliver £80m of sales and £5.5m of profits this year, up 70pc and 82pc respectively on previous years.

Blue Inc can trace its roots back to 1912 when it traded as A Levy & Sons. Last year the group expanded with the purchase of more than 40 stores from collapsed rival The Officers Club, and earlier this year it snapped up 20 stores from fashion chain D2 Jeans when it went into administration.

Since retiring from M&S, Sir Stuart has invested in online retailer Hut Group and private equity house Bridgepoint. He is also a non-executive director at Woolworths, the South African food and clothes group.

The 63-year old ended his six-year tenure with M&S in January 2011, bringing a close to an eventful leadership which attracted both praise and criticism. Sir Stuart brought in key talent to drive a revival of M&S clothing ranges after taking the helm and commissioned advertising campaigns featuring the likes of celebrities Twiggy, Erin O’Connor and singer Myleene Klass.

Sir Stuart joined M&S as a trainee in 1971 and remained there for 17 years. He later joined Burton Group, Argos, Booker and then Arcadia before becoming M&S’s executive chairman in 2008.

But his role, combining chairman and chief executive, angered some investors as it breached corporate best practice.

M&S, Britain’s biggest clothing retailer, posted a fall in profits in May, the first time profits had slumped in three years.

Marc Bolland, the chief executive who took over from Sir Stuart, said the retailer had scaled back its plans to substantially increase its sales, blaming the “increasingly challenging consumer backdrop”.