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03 June 2004

Marks & Spencer Supply Chain Development

It is with sadness that Marks & Spencer has made the decision that it will no longer be working with Desmond & Sons Ltd. The company will buy garments direct from Desmond's joint venture factories overseas, with effect from Autumn 2004.

This decision follows a thorough review of Marks & Spencer's supply chain, in order to reduce lead times, eliminate complexity and reduce costs, which can be re-invested in better products and lower prices.

Marks & Spencer will also be buying out Desmonds' 25% share of the Zip Project Ltd, the joint venture company that produces childrenswear for Marks & Spencer. Zip will now operate as a wholly owned subsidiary of Marks and Spencer Group plc.

Vince McGinlay, Director of Supply Chain, said: 'Whilst we have a strong commercial case for this decision, we do regret the impact that this will have on Desmonds' employees. However, our supply chain strategy is to grow rapidly the proportion of our clothing sourced direct from overseas factories by 2006. This will enable us to get better products to our customers, more quickly and at lower cost.'

Marks & Spencer remains committed to Northern Ireland having already created 1,500 jobs in the Province and recently announced plans for a further 50 at the new store in Omagh. Marks & Spencer has invested £35m in its Northern Ireland stores over the last 18 months.

-Ends-

For further information, please contact:
Sue Sadler Corporate Press Office 020 7268 8642

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