Fashion update

Having weathered the storm of marks & spencer’s recovery programme, the retailer’s legal department is ready to work on the new-look stores. Husnara Begum reports

Marks & Spencer’s legal department escaped unscathed from the redundancy programme that accompanied the recent upheaval at the retail giant, but head of legal Robert Ivens says that the period before and during the recovery was tough for everyone, including his team, which had to demonstrate greater efficiency. “It wasn’t a nice time. I remember day-in and day-out, colleagues would pop their head around the door to say they were leaving the very same day,” he says.
The small legal department was inevitably at the heart of the recovery programme. It was heavily involved in the closure of Marks & Spencer’s loss-making international businesses, including the sale of the bulk of its French stores to Galeries Lafayette in 2001 and the return of £2bn to shareholders in 2002. “In each case we worked alongside outside counsel. But at the same time it was business as usual,” says Ivens. Freshfields Bruckhaus Deringer‘s network of international offices advised on the international disposal programme, except in Germany.
Ivens is adamant that the company has long since bounced back from its troubles, citing six consecutive quarters of growth and the fact that last year it was the best performing FTSE 100 stock.
“My perception is that we lost the faith of our customers. It’s not as though they fell out of love with Marks & Spencer, they just deserted us because we didn’t provide the products or service they demanded,” he says. “But once we got our act together and started to meet customer expectations, they suddenly started coming back to us.”
The nine-strong legal department is an interesting mix of highly experienced lawyers who have worked at the retailer for more than a decade and junior lawyers who have joined during the past 12 months. Ivens himself has been at Marks & Spencer for just over 17 years and Tony Roberts, who heads a three-strong team of property lawyers, has worked at the retailer for 15 years. Within the last year, Marks & Spencer has hired an intellectual property lawyer, two property lawyers and a consumer protection lawyer, who all have between two and five years post-qualification experience. The team’s remit now extends to franchising, contract law, brand protection and retail issues, employment matters and property work. The team is also part of Marks & Spencer’s corporate governance group, headed by company secretary Graham Oakley. “That new energy coming in, together with the existing experience we’ve got, gives us a pretty good mix for an organisation like ours,” says Ivens.
Although as much work as possible is handled in-house, including most aspects of the company’s restructuring of its product distribution, there remains a major need for outside assistance. Marks & Spencer has relationships with a number of law firms, but it does not operate a legal panel. “We don’t have a formal panel in the sense that I think we’re slightly more flexible than that. Our policy has always been to go to the firm we think provides the best service at that particular time in respect of a particular matter,” says Ivens.
Major corporate work is generally farmed out to Slaughter and May‘s corporate head Nigel Boardman and corporate partner Andy Ryde. The firm advised Marks & Spencer in connection with the return of £2bn to shareholders last year. The highly complex transaction was facilitated through a court-approved scheme of arrangement and the creation of a new holding company.
Allen & Overy (A&O) advises Marks & Spencer on corporate finance matters. The magic circle firm was first instructed by the retailer in December 2001, in relation to the lease securitisation of 49 of its retail properties. The deal involved the transfer of properties valued at £350.5m to Amethyst Leasing (Properties), which then leased the properties back to Marks & Spencer.
Most recently, A&O has been advising Marks & Spencer on the launch of its new &More credit card, which is due to go live nationally on 6 October. The firm helped Marks & Spencer put in place the committed facilities for the borrowings that are needed to support the initial launch of the combined credit card and loyalty programme.
Ivens uses a whole raft of firms, including Denton Wilde Sapte, Osborne Clarke, SJ Berwin, Wragge & Co and Manchester-based Jones Maidment Wilson, for property law advice. Of these firms, Jones Maidment, Osborne Clarke, SJ Berwin and Wragges have been instructed to advise on the roll-out of the Simply Food stores. All the mandates have been won on a region-by-region basis.
The launch of one Simply Food store a week has also generated work for Bond Pearce. The firm is helping Marks & Spencer to process applications for liquor licences, which is a hugely important part of the company’s legal work, according to Ivens.
SJ Berwin also acts for Marks & Spencer in relation to competition law issues. Currently, it is advising the retailer on the Competition Commission inquiry into the ongoing battle to take over Safeway. Even though Marks & Spencer is not bidding for Safeway, the outcome of the takeover may affect its interests. “It’s really a belt and braces approach to protect our interests, in the sense that whatever happens, the outcome of this is going to be a complete rehash of the grocery business. We’re a player in that so we’ve got to make sure our own interests are protected,” Ivens says. “There may also be opportunities for us. We’ll just have to see what becomes available.” On the contentious side, Freshfields advises on major commercial litigation and Wragges handles smaller cases. In 2001, the magic circle firm successfully won a case in the House of Lords against William Laird. Laird, a former supplier, was suing Marks & Spencer for abruptly ending a 30-year supply relationship. The retailer ended its contract with Laird after it decided to source its clothes from outside the UK.
Ivens is upbeat about the future. “There’s a huge amount of exploitation to do with our existing product range,” he says. “But who knows what we may get up to in the future. Don’t forget we have a chairman who has an encyclopedic knowledge of the European retail business.”
Robert Ivens
Head of legal
Marks & Spencer

Organisation Marks & Spencer
Sector Retail
Turnover for year ended 31 March 2003 £8.08bn
Employees at year ended 31 March 2003 67,100
Legal capability Nine lawyers and three paralegals
Head of legal Robert Ivens
Reporting to Graham Oakley, company secretary
Annual legal spend £1.5m to £2m
Main law firms Allen & Overy, Bond Pearce, Denton Wilde Sapte, Freshfields Bruckhaus Deringer, Jones Maidment Wilson, Osborne Clarke, SJ Berwin, Slaughter and May, Wragge & Co