Healey & Baker’s plans for a new headquarters at Paddington Basin have been thwarted by Marks & Spencer.
M&S said this morning it would end its 48-year tenure at its 44,000 sq m (473,627 sq ft) Baker Street head office and move to Paddington as it delivered a third consecutive slide in annual profits.
The retailer announced it had signed a deal with Chelsfield to rent an office building at the Paddington Basin scheme. M&S gazumped Healey & Baker, its retail agent, and Killik & Co the stockbroker. But the Paddington office is expected to house just 1,600 of M&S’s 3,500 head office employees, fuelling fears of major job cuts.
Andy Gulliford head of investment at Healey & Baker said: “It was one of our options but there is more than one development at Paddington. In an ideal world we would like have all our West End operations in one building we have never given a commitment to one particular site and have quite a few irons in the fire.”
M&S will leave its historic home in mid-2003 and will move to a new 22,000 sq m (236,814 sq ft) building designed by Lord Rogers of Riverside. As well as a head office, it will include a 1,200 sq m (42,377 sq ft) shop selling food and clothing.
The move is seen as key to the retailer’s bid to shake up its sluggish corporate culture. According to market sources the deal will cost the company at least £8m pa in rent. M&S currently pays a peppercorn rent on Michael House on Baker Street, which it acquired in 1953.
Luc Vandevelde, M&S’s chairman and chief executive, said: “This move to a more efficient, modern environment takes us into the next phase of building a better Marks & Spencer business. It also gives us the opportunity to release the financial asset we have in Michael House.”
M&S also said three non-executive directors would retire, including David Sieff, the last member of the dynasty that guided M&S to its one-time position as the UK’s favourite clothing retailer.
The group’s pre-exceptional profits fell to £480.9m from £517.2m the previous year.
Knight Frank acted for Chelsfield, while CB Hillier Parker acted for M&S at Paddington Basin.
EGi News 22/05/01
