Marks and Spencer's Irish outlets outperform their UK counterparts

Contrary to its performance in the UK, Marks & Spencer continues to trade exceptionally well here, according to the company's Irish general manager Steve Costello.

In addition, Mr Costello says the British chain would like to expand in the Republic and has ambitions to open outlets in both Limerick and Galway as well as the southside of Dublin but has been held back primarily by the problems of finding suitable sites and meeting planning regulations.

English-born of Irish parents, Mr Costello has been based in Dublin for the past three and a half years, having worked in Northern Ireland during the previous decade. He remains optimistic that Marks & Spencer's Irish operations will not suffer from the same problems as those experienced in the UK.

The company announced last month that on a like-for-like basis, excluding income from new or refurbished outlets, sales fell by 5.1 per cent in the 16 weeks to January 20th and by 2.3 per cent in the eight-week Christmas trading period. Certain divisions suffered particularly badly, such as clothing and footwear, where sales declined by 9.3 per cent, and gifts, by 4.8 per cent.

Mr Costello insists that the experience in Ireland - which Marks & Spencer categorises as part of its European rather than British operation - has been completely different for some time, not least thanks to the buoyancy of this state's economy in recent years. With only 300,000 sq ft of trading space here spread over four stores, three of them in the greater Dublin area, the company has managed to attract annual business now in the region of £250 million. The Liffey Valley Centre outlet, opened in October 1998, has registered a faster growth rate than any of the company's other new branches in the past 10 years. According to Mr Costello, Marks & Spencer has five per cent of the Republic's clothing business, leading to yearly returns in the region of £1,000 per sq ft - "a figure any retailer here would envy".

He also says the company has acquired almost 1 per cent of the state's food sales, despite its mere handful of outlets and their relatively small size - 18,000 sq ft in Dublin's Mary Street and Grafton Street, 13,000 sq ft in the Liffey Valley Centre and Cork.

"It has been going like an express train," he comments of this division, adding that Marks & Spencer's low-fat "Count on Us" range introduced last year has registered "massive increases in more than double digit figures".

The company's Irish stores are expected to outsell those around the rest of the world in Valentine's Day-related products and the Marks & Spencer "Autograph" range of clothing created by well-known designers, sold better in Dublin's Grafton Street store than anywhere else except the branch in Marble Arch, London.

Other areas in which Irish outlets of the company have been doing well are childrenswear - "we're probably the market leaders here and sell on average 50 per cent higher than in the UK" - and homeware.

Mr Costello believes there are a number of reasons why Marks & Spencer's experience here should be so different from that on the other side of the Irish Sea where poor sales have been recorded for the past few years. One obvious explanation lies in the relatively small scale of the Irish operation. Although the company has expanded since first opening on Dublin's Mary Street 22 years ago, the most recent of its outlets to open was in the Liffey Valley Centre two years ago.

In the UK, Marks & Spencer now has some 300 stores covering around 11 million sq ft; managing such a large business from London could never be easy. The Irish division enjoys a considerable degree of autonomy and can respond to local circumstances, with products sold here selected specifically with consumers here in mind.

"We have much more independence here than do regional divisions in the UK," Steve Costello observes "and we can choose what, and how much, of what is on offer each season we want for our marketplace."

In addition, the group's Irish manager believes media response, which has been almost consistently negative towards Marks & Spencer among the British press of late, is more favourable here. And "our Irish customers like us, we've an active community programme, we've established extensive networks and we're becoming more Irish every year."

As evidence of this last point, he notes that more of the stores in the Republic have Irish managers rather than those brought in from Britain for a few years. He argues that local staff also enjoy their work and, as an example of this, points out that 75 of the Mary Street branch's 120 employees have worked there since it first opened.

If, as the group - and Mr Costello - hope, additional growth does take place in the near future, the character of the new branches may not be the same as that of the old premises.

"Because of the way the population is spread, I think we'll have to look at different formats for different parts of the country." New branches of Marks & Spencer might, for example, take the form of "ministores" offering a selection of the company's goods and so allowing more outlets to be set up across the state. The three key locations - in south Dublin, Limerick and Galway - are unlikely to follow this model, but Marks & Spencer has yet to find sites for any of these despite regular articulation of expansionist ambitions.

"One of the problems with Marks & Spencer in the UK is that they have too much space," says Steve Costello. "Here in Ireland we need more. We're actively looking to get it, as quickly as possible. We should be looking for a market share of 8 per cent, which is there for the taking."