Further jobs losses are likely in the North following radical plans by retailer Marks & Spencer to cut its annual supply-side expenses by £450 million sterling (€705 million) after 2002.
Some 10,000 clothing and food workers are employed by M & S suppliers in the North, where the company employs 1,500 staff at its seven stores and all-Ireland distribution centre.
The chain, which reported a 43 per cent fall in half-year pre-tax profits yesterday to £192.8 million in the 26 weeks to September 26th, has begun a "radical overhaul of buying and distribution". Group sales declined by £100 million on the comparable period last year to £3.7 billion. Last week, M & S ended its contracts with William Baird, a Glasgow clothing firm which employs 500 workers at two plants in Co Down. These jobs are likely to be lost as the firm manufactures exclusively for M & S.
Describing the cutbacks as "significant", a Northern Ireland director of the Confederation of British Industry, Mr Nigel Smyth, said firms in the North would be affected. "M & S is under pressure from the financial institutions. A lot of players in the province are going to be under pressure."
Asked if this was generally accepted by industry figures, Mr Smyth said: "I think it is. It came through 15 months ago when M & S first got into difficulty."
A spokeswoman for M & S in the North said the firm had no comment to make on the likelihood of other contracts losses as cut back plans had not been finalised.
In the Republic, where M & S employs 1,250 workers at four outlets in Dublin and Cork, a company statement said it had a strong six months. Speaking to The Irish Times, M & S Ireland's general manager, Mr Steve Costello, said sales had increased significantly in the period.
He attributed this to a doubling of floor space following the expansion of the chain's Mary Street branch in Dublin and the opening of its outlet at the Liffey Valley centre. "After a slow start, the Liffey Valley store has made excellent progress and is performing strongly in foods," said Mr Costello. The chain also has branches on Grafton Street, Dublin and at Merchants Quay, Cork.
Mr Costello said M & S Ireland had doubled its annual business with food suppliers in the Republic to £40 million in the past three years. Despite yesterday's announcement, Mr Costello said the company was planning to increase this business.
Stating that Ireland was a "young market" for the company, he said it was not experiencing the same difficulties as it was in the mature market of Britain. "In Ireland we've been working in a different environment. The comparison is not really like with like". He agreed the situation at group level was "obviously serious" but believes "the business will be in a much better situation within two years."
In Britain, where M & S's middle market position is under threat from discounters and high street fashion stores, the company's chief executive Mr Peter Salsbury highlighted the need to speed up action to move it forward.
M & S shares closed at 278p in London yesterday, down 5p. Plans to start accepting credit cards and sell off part of its property portfolio helped the shares pull ahead early on.
The company is considering appointing a full-time executive chairman. This would be an about-turn as it has not had an executive chairman since Sir Richard Greenbury switched to a non-executive role in February and Mr Salsbury was appointed chief executive. M & S was previously expected to appoint part-time chairman.
