The harsh world of the high street

To many, Marks & Spencer is more than just a shop. It is an institution, rather like the BBC or the NHS, with which they have grown up. It feels like a strand of the national fabric. And, in itself, this is no bad thing - it is a sign that M&S has provided quality and good service over the years, earning fierce loyalty and an unusual degree of affection from its customers.

To many, Marks & Spencer is more than just a shop. It is an institution, rather like the BBC or the NHS, with which they have grown up. It feels like a strand of the national fabric. And, in itself, this is no bad thing - it is a sign that M&S has provided quality and good service over the years, earning fierce loyalty and an unusual degree of affection from its customers.

But for all the reverence with which many treat the name, and despite its special place in the heart of Middle England, M&S is just a shop. No more, no less. The whims of the high street customer dictate the fortunes of this company as for any other retailer. And at the moment M&S is losing the battle for market share to rival shops and supermarkets - although it is often forgotten that it still makes fairly hefty profits in an increasingly competitive environment. The planned takeover bid announced by the entrepreneur Philip Green, however, has come at a time when M&S's sales are falling, in both its clothing and food departments. And the recent departure of its part-time chairman Luc Vandevelde has left it rudderless; shoppers have only to step inside a branch to see that this is a store that has lost its way.

Some in the City and elsewhere think Mr Green is too uncouth to own such a cherished high street name; they argue that shareholders should resist doing a deal to give him control, despite the financial gains they would almost certainly make. They claim he is interested only in squeezing as much money out of companies as possible, and that he would take M&S downmarket. This line of argument should be ignored, since it reeks of snobbery and has no place in the modern business environment. The truth is that Mr Green's management of BHS and the Arcadia group (which owns Topshop and Miss Selfridge among others) has been highly successful. The only question for shareholders is whether he would be a more effective steward of their company than the current directors or any other raiders waiting in the wings.

Of course, Mr Green's bid will raise competition issues, which will need to be addressed. But whatever happens to M&S in coming months, investors should remember that, despite the brand's distinguished history, no business has a God-given right to exist. The high street is an unforgiving place - even for shops that occupy a place as national institutions.