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M&S calls time on Canadian empire

THE CITY heaved a sigh of relief when Marks and Spencer said last week it was finally selling D'Allaird's, its troubled Canadian ladies' wear chain.

M&S's 20-year involvement had long been a tale of woe, exceeding troubles at Brooks Brothers, its yuppie US arm.

During the week, even blunt-spoken chairman Sir Richard Greenbury said: "It would have been difficult to get it more wrong."

In 1974, M&S gave altruistic reasons for its first-ever expansion overseas: "the importance of developing exports in order to help, however modestly, to reduce the country's balance of payments deficit".

Even in 1989, a company magazine, M&S World, admitted that the customer image was of a "British woman expatriate who shops at M&S in recognition of the values she grew up with". This was despite the fact that British emigration to Canada has been declining since the end of the Second World War.

Competitors praised M&S for its quality but claimed that it never quite got the hang of selling in the colonies. "The clothes at D'Allaird's didn't appeal to most women," said the manager of one rival shop in Toronto. Changes, including a recent attempt to attract younger customers, miserably failed.

This weekend, City analysts were still baffled by why it had persevered for so long: "It started before my time but as far as we know it was a consistent disaster, except for a few years in the 1980s," said one analyst after the sale, at a book loss of pounds 15m, to specialty retailer Comark. The division only ever made reasonable profits, of nearly pounds 9m, from 1984 to 1987; otherwise returns were minimal or negative.

Elsewhere, in particular in Asia, the Marks & Spencer shops have succeeded by moving down market while keeping their traditional British image. The company now hopes to do the same in Canada where its remaining stores trade under the M&S name.

Meanwhile in the UK, M&S director Roger Aldridge will announce on BBC's Money Programme tonight that the firm would be prepared to pay an extra tax to improve town centres where it trades to help them compete with out-of-town malls.