Marks & Spencer taps suppliers for store revamps

Wednesday, 5 October 2011 00:01 - - {{hitsCtrl.values.hits}}

LONDON(Reuters): Marks & Spencer, Britain’s biggest clothing retailer, has asked major suppliers to make a contribution to its store revamp programme and associated advertising as it seeks to keep a lid on costs in a tough retail market.

A spokeswoman for the firm, which also sells homewares and upmarket food, said on Tuesday it had brought together its top clothing suppliers last week to request the one-off payment.

“We did invite them into a meeting and ask for a one-off contribution of 1.25 percent based on their annual turnover with us,” she said.

She declined to say how much money that would raise for the retailer, which plans to spend 600 million pounds ($929 million) over the next three years on a new store format as it seeks to encourage shoppers to spend in an increasingly tough trading environment.

The Financial Times estimated the figure in the low tens of millions of pounds range.

“This is an exciting time for M&S and its suppliers; we’ve set out a very clear strategy to grow our business over the next three years to our mutual benefit. We therefore believe it is right that our top suppliers are part of the journey from the start,” the M&S spokeswoman said.

In November, M&S set out plans to deliver additional UK sales of 1-1.5 billion pounds over three years.

The firm is seeking to double sales in both its Internet business and overseas operations to about 1 billion pounds by 2013-14.

In July, M&S posted a seventh consecutive quarterly rise in underlying sales.

But its shares have lost 13 percent of their value over the last three months as several brokers have reduced profit forecasts because of the tough macro economic outlook and unhelpfully warm autumn weather.