UK: M&S To Dismiss £54 million Claim

Marks & Spencer will today launch a legal bid to have a £54 million compensation claim against the company thrown out of court.The clothing retailer is facing the claim from textile firm William Baird, which is laying off more than 4,000 staff after losing a lucrative contract to supply the high street chain.In January, Baird launched a claim for compensation alleging M&S had breached its contract. But M&S's now hopes to see the claim dismissed as having no legal grounds.A result on the application is not expected until early July.A spokeswoman for M&S said today said the company was confident of its case."We do sympathise with the plight of the Baird workers, but we believe we have fulfilled all our obligations," she said.M&S has seen its business squeezed on one side by discount competitors such as Matalan and on the other by branded clothing stores such as Next.Earlier this year M&S reported pre-tax profits had fallen to £417.5 million from £546.1 million the previous year.As part of its recovery plans it decided to buy more of its clothes from lower cost overseas manufacturers and drop Baird.M&S will cease taking any products from Baird later this year, but the textile firm argues that after a 30-year relationship with M&S it is entitled to a longer notice period.M&S's difficulties in the clothing market have been reflected at other middle-market clothes chains.Top Shop and Dorothy Perkins group Arcadia has also seen its sales and profits squeezed.And just last week C&A announced it was pulling out of the UK and Irish markets altogether in a move which will see 109 C&A stores close and 4,800 jobs lost.The knock on effect of the troubled British clothing market has left the UK's textile companies reeling.Baird was driven deep into the red last year with losses of £93.5 million.Earlier this month Trade and Industry Secretary announced a £15 million aid package for Britain's textile industry.