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
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
Lowe acknowledges, however, that the impact of the story and the
breakdown of sales figures it contained 'did affect people's view of our