BEHIND THE HEADLINES: Leaked figures serve to further frustrate M&S

Another controversial week for beleaguered retailer Marks & Spencer

has seen leaked financial results and a court action by French workers

further undermine attempts to solve the firm's image problems.



The chain's announcement of plans to close its 18 retail outlets in

France, as part of a pan-European campaign of 38 store closures, led to

hundreds of employees gathering outside the retailer's flagship Paris

store on 6 April. This protest coincided with a court case brought

against M&S by the French unions.



Le Tribunal de Paris ruled this week that the decision to close the

stores contravened strict French and European laws requiring

consultation with employees before ceasing operations. The court ordered

that formal talks with workers commence, ignoring M&S's defence that

their announcement was merely a proposal to be acted on by the end of

2001.



According to spokesman Louis Hill, M&S's 'good reputation' as an

employer includes clauses requiring consultation as part of any

redundancy plan in its employees contracts. However, he accepted that

the remaining months of the firm's French operation are likely to be

somewhat difficult, understating the point by advising that the proposed

'radical restructuring' would inevitably lead to a 'period of negative

publicity'. However, M&S maintains that it acted in the context of its

financial losses in France, seeking to 'focus on its UK business'.



The UK accounts for 85 per cent of Marks & Spencer's global turnover,

and in addition to overseas cutbacks, M&S's catalogue shopping division

and two stores are being sacrificed in an attempt to focus on the

oft-talked about 'core market'. For M&S, this means recapturing their

image, if not their financial status, as the UK's most trusted high

street clothing retailer.



The perceived need to improve UK business was put into stark perspective

when an internal financial report was leaked to the BBC, indicating a

decline in the firm's UK operating profits from pounds 203m to pounds

166m in the last year.



M&S head of external communications Jane Lowe described the leaked

figures as 'a particularly frustrating experience'. The information,

dating from pre-December 2000, was for the most part already in the

public domain.



Lowe acknowledges, however, that the impact of the story and the

breakdown of sales figures it contained 'did affect people's view of our

situation'.



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