Streamlining operations
Mark & Spencer’s announcement of its plans for its Irish fleet of stores has garnered both praise and criticism. Fiona Donnellan reports
Print10 September 2013
There has been plenty of reaction to Marks & Spencer’s plans for its Irish operations. Last month, the company released a statement on a Wednesday morning stating that it had carried out a "strategic store review" in the Republic of Ireland. The outcome of the review: four store closures, a new flagship store in Limerick and investments in the rest of the M&S portfolio.
Ceasing trading
The most prominent outcome of the review was the decision to close four M&S stores in the Republic. The stores were closed on 17 August, with some staff retained in order to clear out the premises. The four stores that closed were: M&S Mullingar, Co. Westmeath; M&S Tallaght, Dublin 24; M&S Simply Food, Dun Laoghaire, Co. Dublin and M&S Simply Food, Naas, Co. Kildare. In total 180 jobs were lost with the store closures. Speaking on the day of the announcement, head of M&S Ireland, Jonathan Glenister said: "Our first duty is to our affected store teams and we have spoken to them directly today. We will now do all that we can to help them through the coming weeks and support them with their future employment needs. We are now closely engaging with our union officials from Mandate and SIPTU on all matters arising." The news came as a blow to staff at the four stores. The doors were closed for the day but reopened the following day to continue trading until 17 August when they were officially closed.
General Secetary of Mandate trade union John Douglas
Unions balloted their members and staff voted for industrial action following the break down of talks at the Labour Relations Commission on the issue of redundancy. Mandate, which represents 95% of M&S workers, issued the UK retailer formal notice of industrial action starting on 10 September at its stores in Tallaght, Dun Laoghaire, Mullingar and Naas. The union said 88% of the 180 Irish workers affected by the closures are angered that the company is insisting on compulsory redundancies only and has yet to outline the terms of the redundancy packages. Mandate general secretary John Douglas said: "The result of the ballot clearly indicates the level of unity within the Marks & Spencer workers who are very upset at the way the company intends to make them compulsorily redundant without any attempt to explore alternative options. We have registered our frustration and disappointment with the company whose actions have caused great anxiety for their workers, not only in these stores, but across the whole of Marks & Spencer’s stores in the Republic of Ireland." The union spokesman said the pickets could escalate across the entire M&S chain in the Republic if the company refuses to meet with the union to discuss any alternatives to compulsory redundancies, including redeployment to other stores. "The company is saying they won’t entertain voluntary redundancies, they won’t even discuss it," he said.
Jonathan Glenister said M&S was "disappointed by the result" of the ballot. "We are hopeful that this situation can be resolved quickly so that we can proceed with wider negotiations. We have been very clear and honest from the start of this process that, unfortunately, there are no redeployment opportunities available to our employees affected by the four store closures and remain committed to reaching agreement as soon as possible around the terms of redundancy." At the time of going to print, the issue had not yet been resolved. ShelfLife will report on further developments in the October issue.
Victim of the bust
Three of the four stores that have been shut down were opened in 2007 while the Dun Laoghaire site was first opened in 2003. With the economic downturn taking its toll on many major players in the retail industry in Ireland, it may come as no surprise to many that something had to give for the UK retailer. M&S is marketed at the more affluent shopper. In the current climate, consumers have less disposable income and are looking for the best value possible. Established brands are finding it difficult to hold onto market share in an already saturated market. The rise of discount retailers like Aldi and Lidl, along with more savvy shoppers, means that the M&S target market is declining. The cost of renting a retail space, along with local authority rates and rising costs of operations, may also have played a role in the decision to close the units.
Flagship plans for Limerick
However, the outcome of the strategic review was not all negative. M&S also announced plans for a new flagship store in Limerick. The 72,000 sq ft store is earmarked for the new Horizon Mall (formally Parkway Valley) on the outskirts of the city centre. It’s thought the construction phase will create up to 1,000 jobs while the store will employ 250 people once it’s opened. M&S says that terms and conditions have been agreed for the new operation. A provisional opening date of autumn 2016 has been announced by the firm.
It’s been a long road for M&S to set up a base in the Treaty City. Hopes had been dashed many times over recent years. Limerick Leader journalist Anne Sheridan says planners have been trying to lure the retail chain to Limerick since the 1970s. "They initially looked at Spaight’s Shopping Centre, now Dunnes Stores on Henry Street, but their property manager at the time reportedly said that he thought that ‘Limerick was too small population wise’. Three years ago, [the retailer’s] plans to open its first flagship store in Limerick – this time at the Crescent Shopping Centre – went before An Bord Pleanála, and were ultimately turned down, to allow the city a chance to recover lost commercial ground." The property has been granted planning permission by Limerick County Council which is valid for another three and a half years to allow Belfast-based and Indian-born developer Suneil Sharma to complete the development.
Mixed reaction
Reaction to the plans has been mixed. While most people welcome the boost for the employment market, Limerick Chamber and Retail Excellence Ireland have expressed disappointment at the location of the new store. "I think it’s going to be a major blow and crisis for the city," said Limerick Councillor Michael Sheahan, "but if it’s a fait accompli, then we have to accept it." David O’Brien, manager of the Milk Market in the centre of Limerick, said: "The city is dead as it is, this will bury it and put the final nail in the coffin. The city’s supremos have to fight this. Marks & Spencer is a fantastic brand, but if they don’t come into the city centre they should be discouraged." The retail landscape of Limerick city centre is struggling. Clothing retailer Wallis recently announced that it is to close its store on Cruise’s Street with the loss of 21 jobs. It is the third store the Arcadia group will have shut down on the street, with Dorothy Perkins and Evans also closing in recent years.
However, the plans have been welcomed in some quarters. Local Fianna Fáil TD Willie O’Dea welcomed the economic boost it will, no doubt, bring to the city. "I would prefer it to be in the city centre, but in a situation where Limerick has a 30% unemployment rate, we can’t look a gift horse in the mouth." Labour Councillor Joe Leddin said: "On a day when over 300 people across the country in the retail sector have lost their jobs this is a good news story for Limerick." There is no argument that the store will attract more shoppers to the Shannon-side city from surrounding towns and counties. It will be the first M&S in Limerick; the closest stores at the moment are in Cork, Clonmel and Killarney.
Improving the existing network
M&S also has plans for the rest of its Irish fleet. Head of M&S Ireland Jonathan Glenister said the retailer was committed to its presence in the Republic. "We are very proud of our Irish business and will continue to invest in it for the future. We hope that the news of a new flagship store and an investment in our remaining estate will be welcomed by our customers and seen as a confirmation of our commitment to the Republic of Ireland."
Along with the new Limerick store, M&S is set to reposition its Grafton Street store in Dublin city centre as an M&S regional centre. The store will showcase "the latest in M&S thinking across store format, products and services". The retailer says it is committed to investing in its Irish portfolio. M&S Ireland has 16 full offer stores in the Republic and one Simply Food store. In April 2012, M&S launched the much-anticipated Irish website www.marksandspencer.ie for customers here.
Committed for the future
In order to cement the chain’s commitment to the Republic in customers’ minds, Glenister added: "We have traded here for the last 35 years, employ around 2,800 people and have extraordinarily loyal Irish customers, but the last few years have been very challenging. During this time our Republic of Ireland business has been under continuous review and we have made savings and found efficiencies wherever possible."
On its website, the retailer says it aims to move away from being known as just a British retailer and gain a more global presence. "Our plan is to transform M&S from a traditional British retailer into an international multi-channel retailer. Our heritage of innovation helps us lead the way with first-to-market products across food, fashion and homewares. We are the UK’s leading clothing retailer and offer high-quality food, with a focus on freshness, convenience and specialty."
Whatever the future holds for M&S, the company is adamant that it remains committed to its Irish customers. With the Limerick store scheduled for completion in 2016, we’ll have to watch this space to see how it’s received.
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