M&S moves into home furnishing

MARKS & Spencer will unveil plans on Tuesday to set up a new chain of stores selling home furnishings. The announcement comes as chairman Luc Vandevelde reports a sharp recovery in profits for the year to the end of March.

M&S has already opened six M&S Simply Food shops in an attempt to capitalise on the company's name and exploit demand in areas that could not support a full-sized store carrying a full range of products.

Now Vandevelde has decided the company should experiment with a chain selling the company's home goods - ranging from carpets and furniture to clocks and picture frames.

At the moment, M&S has its full home range in only 41 of its biggest shops. A further 60-plus outlets carry a limited selection of household products.

Vandevelde has acknowledged that, despite having handed back about £2bn to shareholders, the company is likely to accumulate a fresh cash pile over the next three years. It is therefore looking for new areas in which to invest the surplus.

The company is expected to announce full-year profits of about £635m, from £146m last time, fuelled by strong growth in clothing sales as a whole and by M&S having taken market share from its competitors. The company will also this week unveil plans to launch its own credit card.

Vandevelde has indicated that he eventually intends to split his job as executive chairman. He will remain in the chair, but the chief executive's role is expected to be taken by UK retail chief Roger Holmes.

No announcement will come this week, but Holmes is likely to be named by July.