M&S challenges high street banks with launch of new advice centres

Marks & SPENCER, as well known for its falling share price as for its knickers, has launched a bold attack on high street banks to draw new customers to its financial services arm.

Marks & SPENCER, as well known for its falling share price as for its knickers, has launched a bold attack on high street banks to draw new customers to its financial services arm.

Marks & Spencer Financial Services will open drop-in centres in up to 30 of the group's stores, which aim to offer customers the same confidential consulting area to discuss their finances as offered by banks.

The initiative comes as the stores group puts the finishes touches to a review - the results of which will be announced next month - which is expected to lead to the closure of up to 40 shops, mainly from the stores acquired from Littlewoods three years ago.

The closures are likely to affect 1,500 staff although most should be found other jobs within the group, thereby avoiding large-scale redundancies.

Alongside the drop-in centres, which will be manned by trained staff, the retailer's financial division is also planning an "ambush advertising" campaign.

The campaign would involve putting adverts in bus-stops and similar areas opposite banks, saying "Unhappy with your bank? Come to M&S".

Plans for the campaign have not been finalised yet, but it is believed that Marks & Spencer Financial Services' management want to do something dramatic to raise awareness of the brand, which has launched a number of new products this year and which is intended to form a greater part of the group's profits. It currently generates 20 per cent of total profits.

John Walton, finance director of Marks & Spencer Financial Services, said: "The vast majority of people still use high street banks when in many cases they could get a better deal elsewhere."

The move by Marks & Spencer Financial Services marks the first decision by a retailer to use a significant amount of floor space to sell customers financial products. Other new entrants, including supermarkets, mainly operate their financial arms through tills.

The financial centres will be part of the £60m the beleaguered retailer has put aside to revamp its stores.

The drop-in centres will be opened in 10 stores within the next two months, with a further 20 expected to follow in the next 18 months.