Marks & Spencer (M&S) continues to perform well in the Irish market in spite of setbacks in Britain that prompted a 19 per cent fall in profits and a loss of market share, the retailer indicated yesterday.
With two new Irish outlets opening this summer, stock market analysts in London said the Irish operation remained one of the few "bright lights" at M&S as the giant retailer struggles with difficult trading conditions in its home market.
An M&S spokesman said yesterday that the group would open stores in the Corrib Centre in Galway and in Blackrock, south Dublin, in the next two months. This will bring its Irish presence to 11 outlets, up from four at the start of 2003.
While M&S does not publish separate financial figures for the Irish operation, senior retail industry sources in Dublin believe that its annual Irish sales will easily pass the €350 million mark after the addition of four new stores within nine months.
M&S opened a store in Blanchardstown, west Dublin, last November, followed in March with a bigger store at the Dundrum Town Centre, south Dublin. It is experimenting with a new store design in these outlets.
Retail business sources in Dublin say that these two stores would have combined annual sales of €100 million if trading went ahead at the expected level.
According to private research by Euromonitor - quoted last week by the Consumer Strategy Group - M&S had Irish sales of €246.6 million in 2003, a year in which it opened three food-only "Simply Food" outlets. Euromonitor suggested that the sales in 2003 increased from €230 million in 2002, giving it a 1.2 per cent share of the retail market.
A separate analysis by accountants Farrell Grant Sparks for the Consumer Strategy Group suggested that M&S food sales were in the €36.99 million-€86.31 million range in 2003.
Retail business insiders believe M&S regards the Irish market as a source of growth as its British market share comes under threat. They also believe like-for-like sales at M&S's Irish stores are more profitable than at the British outlets.
The company made only a passing reference to its Irish operations yesterday as it revealed that group pretax profits dropped to £618.5 million (€899 million) in the year to April 2nd, 2005, from £763.2 million.
Sales in the Republic "were ahead of last year", it said, adding that the performance of the new stores in Blanchardstown and Dundrum "has been encouraging".
Overall, M&S sales excluding VAT fell 1.7 per cent to £7.03 billion, while sales at its international operations - embracing business in Ireland, Hong Kong and franchise stores - rose 1.6 per cent to £675.6 million.
