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Outlook: M&S folly

EVERYONE KNOWS that Marks & Spencer's new boss, Peter Salsbury, is having to cut his cloth to suit his purse. These are straitened times in the house of St Michael, as the bloodbath at Baker Street and at store level demonstrates only too painfully. But the decision by M&S to scrap its graduate trainee scheme this year looks like a false economy.

For as long as anyone can remember, M&S has been synonymous with enlightened employment policies, fairness and the long-term view. Sure, a company that has swapped the label of Europe's most profitable retailer for one that starts "the troubled stores group" needs to take drastic action - and abandoning its graduate training scheme this year is an obvious way of cutting its costs. But it is difficult to see the logic of it - for two main reasons.

M&S claims that - with redundancies already announced - it can hardly welcome new blood through the front door while ushering existing employees out the back and that it still has plenty of dynamic talent around. But this risks handing its rivals some of the bright young talent of tomorrow that it can ill do without. The dead wood of today may need to be pruned but if there are no green shoots coming through then Mr Salsbury is storing up trouble for himself.

More important, with corporate reputations such delicate blooms these days, this sort of action must send all the wrong signals to the company's core customers - the middle-aged, middle-class parents who make up the backbone of M&S's market.

This is a generation brought up to believe a job at M&S was a noble occupation, nay, a treasured one. If their children cannot get inside the store, why should they bother to follow with their custom?