Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

Marks & Spencer asks clothing firms to pay towards £600m refurbishments

Chief executive Marc Bolland raises eyebrows with request for 1.2% of each supplier’s turnover with M&S to fund store refits

Marks & Spencer has raised eyebrows by asking its clothing suppliers to stump up millions of pounds towards its expensive store refit programme.

Last week Marc Bolland, its chief executive, called its suppliers together to request the one-off payment. A spokeswoman said it has asked for a contribution equal to 1.2% of a supplier’s annual turnover with M&S. The move is expected to raise more than £10m for the retailer and has raised concerns that it is struggling to drum up sales amid tough trading conditions.

Bolland’s plans to reinvigorate the business involve spending £600m on its stores over the next three years. He has also set a target to increase British sales by up to £1.5bn over the same period and a spokeswoman said that growth would benefit suppliers and it was “right” they played their part.

Several brokers have trimmed their profit forecasts for M&S in light of weak sales figures from rivals. Nick Bubb, an Arden Partners analyst, said asking suppliers for money showed “M&S is a bit defensive about the accusation that it is spending too much on store revamps, and that it needs some help in preserving gross margins at present”. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds