M&S steps on growth accelerator

Marks & Spencer, the doyen of retailing, is revving up for a £2 billion growth push which will add 4.5 million sq ft of selling space over the next three years and take the group into Japan as well as other, Far Eastern, tiger economies.

The group, which this week announced a 5 per cent rise in pre-tax profits to £452 million in the six months to September, is also aiming to enlarge its operations in the Republic with the acquisition of an additional 200,000 sq ft of retail space. Most of the extra capacity will come from the opening of two new stores, in Galway and Limerick, the rest accounted for by the expansion existing city centre stores and a move out into the suburbs.

Although no operating figures are given for the group's Irish division, it is understood that business in the Republic continued to perform well, with trade in the flagship Grafton Street store particularly buoyant. A spokesman for M&S in Ireland said that first half turnover had increased "substantially" over the same period last year when it was reported to be £120 million.

M&S chairman Sir Richard Greenbury said that Japan "looks very attractive" with 150 million potential customers and tumbling property prices. He dismissed speculation that the group is preparing to wage war with the major supermarket by expanding its food operations. Food, he says, occupies a quarter of group space " and will continue to do so".

The £2 billion expenditure plans unsettled investor confidence, as did disappointment with the pace of earnings growth, the shares easing on the results. But, with dividend rising 9 per cent to 3.6p a share, investors remain confident in a group that has yet to fail to deliver the goods in terms of long-term share appreciation.