French court rules against M&S

Paris workers take to the streets in protest at M&S

A French court has ordered Marks and Spencer to suspend plans to close its 18 directly owned outlets in France.

The high court ruling follows a legal challenge by French unions representing 1,700 staff in the stores involved.

The unions claimed that the British retailer broke European laws by not consulting with its workers before announcing the closures.

I wish our government would stand up for British workers against multinationals in the same way as the French prime minister who spoke up against M&S

Bill Morris
TUC leader

But M&S says the ruling will make no difference to its plans and only confirms the company's "intention to pursue a dialogue with staff representatives".

The retailer claims it followed the correct procedures under European law by informing workers of the planned store closures half an hour before it made an announcement to the stock exchange.

It denies claims by the French authorities that the announcement was too abrupt and left no room for negotiation.

M&S is maintaining that it has only announced its intention to close the 18 stores at the end of the year.

And an M&S spokeswoman insisted there was still a remote possibility that the stores could remain open.

She told BBC NewsOnline M&S was considering an appeal against the court's decision.

The company, she said, would be pressing ahead with its consultation process in the meantime.

Meanwhile, anger against M&S has also erupted in neighbouring Belgium and the company is expected to hear later this week if it faces prosecution there over its closure programme.

Labour government

Earlier, France's Socialist Prime Minister Lionel Jospin said it appeared that employees had been told of the layoffs by e-mail. He said such behaviour should be punished.

The Labour Ministry has launched its own inquiry into whether French labour laws were violated.

Meanwhile, the leader of Britain's Trades Union Congress (TUC) Bill Morris praised the French reaction to the M&S job cuts on Monday and urged the British government to follow its lead in standing up to multinational companies.

Mr Morris compared the French government's reaction to mass redundancies by M&S with that of Labour to unexpected jobs cuts at places such as Vauxhall at Luton and Compaq in Scotland.

Mr Morris said that the "premier league" of British manufacturing had sacked workers via local radio without any consultation with unions.

"I wish our government would stand up for British workers against multinationals in the same way as the French prime minister who spoke up against M&S," Mr Morris told the Scottish TUC conference in Aberdeen.

Mr Morris criticised Prime Minister Tony Blair for failing to introduce a European directive on information and consultation.

Leaked report

The French court action comes as M&S attempts to play down a leaked report suggesting that its problems are more serious than first thought.

M&S profit per sq foot

1999 - £18.50

2000 - £9.40

The report, leaked to the BBC, shows a fall in UK operating profit.

It also suggested that M&S's overseas stores were performing much better, questioning the wisdom of its decision to close them.

The report showed pre-tax profits for the financial year 2000-2001 could climb to just £430m, about £20m less than City forecasts, leading to speculation that stockbrokers could downgrade M&S.

Clothing profits per employee

1999 - £8,000

2000 - £4,000

It also included details of profit per square foot and profit per employee, not normally released to the public.

An M&S spokesman said the sales figures covered trading over the first nine months of the retailer's financial year, to December, and were already in the public domain "in some way, shape or form".

'Painful'

M&S has re-iterated to the BBC that it intends to press ahead with its foreign store closures.

M&S European losses

France (18 stores) - £25m

Spain (9 stores) - £5.5m

Belgium (4 stores) - £3.3m

M&S's embattled chairman Luc Vandevelde announced 3,350 job European job losses last month amid a restructuring programme, which saw the retailer also ditch its UK Direct home-catalogue business and put its two US business up for sale.

Mr Vandevelde said the "painful, urgent action" was needed to bring about a recovery in the UK.

M&S shares closed on Monday down 2.75p at 260.25p.