M&S plans to drop name at 50 stores

Uneconomic outlets set to move downmarket

Marks & Spencer, which has been battered by the media, suppliers, customers, competitors and the City in the last few months, is considering dropping the M&S name from up to 50 of its stores.

Marks & Spencer, which has been battered by the media, suppliers, customers, competitors and the City in the last few months, is considering dropping the M&S name from up to 50 of its stores.

The move is part of a radical programme aimed at regaining the initiative in a part of the market where M&S's chairman, Luc Vandevelde, fears the retailer is struggling.

M&S is planning a revamp of as many as 50 stores in depressed areas, relaunching as a new downmarket concept. Plans are still being finalised, but among the ideas are for M&S stores to sell newspapers and magazines for the first time ever, and the launch of a second-string brand.

If adopted, this will be the first time in over a century of trading that M&S will have sold goods under any name other that Marks & Spencer's or St Michael, and follows on from the radical plan, announced last month, for M&S sandwiches to be sold in WH Smith's outlets.

The potential rebranding was revealed to the Independent on Sunday by Luc Vandevelde, M&S's chairman, in an exclusive interview.

Mr Vandevelde said the group was looking at up to 50 stores that are on high streets or in shopping centres which are no longer economically viable. If M&S took a hard-headed look at these stores, it would close many of them, but Mr Vandevelde believes the M&S name would be hit too hard by bad publicity if it closed a large number of outlets.

M&S will reveal the new concept for these stores in the next few weeks. "We might want to give this a different name," said Mr Vandevelde. "This is an idea."

M&S is planning a number of radical initiatives to increase its sales. Mr Vandevelde has his eyes on the customers who currently shop at C&A, which has 3 per cent of the UK clothing market and is to close in January. He said M&S aims to win most of that business.

The high street is just one area where M&S is trying new approaches to revive its flagging fortunes. Tomorrow it will launch M&S Connect, a phone service that will undercut both BT and the cable operators.

M&S is to send a mailshot to 100,000 of its account cardholders offering the service on a trial basis. It promises reductions of up to 60 per cent on BT rates for international calls; 50 per cent for national calls; and 15 per cent for local calls and calls to mobile phones.

Maurice Helfgott, the head of M&S Ventures, said the service would be offered to all M&S's 5 million account holders next year. "We want to test it with a few people first so we feel comfortable that the system works, before offering it more widely," he said.

The offer is the first fruit of the joint venture with Talkcast, the digital information and telecoms business founded by former Sega Europe boss Frank Herman.

M&S has invested around £10m in Talkcast but has seen little return so far. The group was forced to close many of its online magazines earlier this year and sold its financial information operation, Sharecast, last month.

M&S and Talkcast plan a number of further deals which will be announced next year. These will include a mobile phone offer and plans to sell M&S goods and financial services via a mobile phone portal.