This Is Guernsey

By Tom Edwards

GUERNSEY’S Marks & Spencer franchise has outperformed the UK business, according to its Bailiwick boss. The retail giant reported a fall in sales over Christmas - its worst period for more than two years.

UK like-for-like sales fell 2.2% in the last three months of 2007, clothes and homeware declined 3.2% and food 1.5%.

But Guernsey M&S franchise managing director Tony Creasey said the local picture was much more positive.

‘Clothing and gifts did particularly well and on the whole trade has been very satisfactory,’ he said.

‘November and the start of December were very tough, mainly because of the bad weather, but Christmas was actually good for a lot of Guernsey retailers.

‘It came a bit late, but there was quite a lot of good news in the final few days.

‘You have to put it in context and not forget that the City is a law unto itself.’

M&S shares fell 19p to 401p and were yesterday trading at the 400p which retail tycoon Philip Green offered in mid-2004 and which the board said undervalued the company.

Their soft performance prevailed despite a huge cash investment in the stores and a massive advertising campaign.

However, internet sales were strong, adding 78% during the quarter, and international sales rose by 15.1%.

National newspaper reports have claimed M&S is struggling to hit profit targets of £1bn and might not pay staff bonuses this year.

In 2007, the firm’s 65,000 workers shared a £91m. handout.

In Guernsey, Mr Creasey said the overall picture had to be taken into account.

‘The situation is not unique to M&S. Next has also produced similar figures - it’s the industry as a whole,’ he said.

‘All of the publicity around the credit crunch and Bank of England interest-rate rises last year are both accountable.

‘But you can talk yourself into a recession if you’re not careful.

‘Like-for-like sales are no doubt disappointing, but overall the reality is encouraging.’

The M&S brand had been reinvigorated by a massive marketing campaign in recent times, added Mr Creasey.

‘Perhaps we were suffering from a negative public image a couple of years ago, but a lot of work has gone into changing that and it’s no longer the case.

‘I don’t think the Guernsey business has ever been damaged by this.

‘The outlook for the future is very good. We have some new ranges coming through this year that have been well received by the media.’

M&S chief executive Sir Stuart Rose said that while conditions in the clothing market were tougher than they had been for 10 years, M&S had not resorted to heavy discounting and so had ammunition in reserve.

The retail giant also has one of the best property portfolios in the high street, making it more resilient than most in coping with slowing UK consumer spending and a deteriorating economic climate.