French firm bidding for M&S stores
French department store chain Galeries Lafayette today emerged as a favourite to buy at least part of Marks & Spencer’s troubled French operation.
The group’s co-chief executive Philippe Houze said Galeries Lafayette had made a bid and was in confidential discussions with M&S about a deal.
‘‘We said in April that we were interested in Marks & Spencer stores for two reasons - prime locations and well-trained staff,’’ he said.
‘‘More than ever, it’s true to say that we’re interested.’’
M&S announced in March its intention to pull out of Europe to concentrate on reviving its business in the UK.
Profits at the retailer have fallen from £1.2bn three years ago to just over £500m last year.
The decision led to a wave of protests from its 1,700 staff in France, where the group has 18 stores, nine in the Paris region.
A French court ruled M&S had broken the law by failing to consult properly with its workers before the decision to pull-out was made.
M&S has insisted its preferred option is to sell the stores as an ongoing concern, thereby safeguarding jobs, by the end of the year.
A spokeswoman today said the retailer was in negotiations ‘‘with a number of people’’ but said the talks were bound by confidentially clauses.
She added: ‘‘We hope to sell the stores by the end of the year. It would be best for the staff and best for the business.’’
Mr Houze refused to say how many stores Galeries Lafayette may want to buy.
The group sells a range of private label and designer clothing and recently sold its stake in food retailer Monoprix.
Results today showed it had sales of around £1.54bn in the first half, up from £1.45bn in the same period last year.
Rival French group Pinault-Printemps Redoute and US giant Wal-Mart have also been mentioned as other possible buyers of the M&S stores.
But Brian Roberts, European retail analyst at Mintel, said: ‘‘The Wal-Mart story is laughable.
‘‘Galeries Lafayette is a department store operation and it makes sense for them to buy the M&S stores. It would be an ideal opportunity for them.’’
M&S will update the City on its second-quarter performance next week. Today, its shares rose 8¾p to 263¾p.
