MARKS & Spencer yesterday launched its banking venture in Scotland but declined to say how many customers it expects to pick up.
The high street retailer’s branch at the Gyle shopping centre in Edinburgh is expected to be followed by others in Aberdeen, Glasgow and at the Braehead centre between Glasgow and Paisley.
Together with its joint venture partner HSBC, it has spent three and a half years preparing to turn M&S Money into a fully fledged bank, offering current accounts and eventually mortgages.
The first instore branch in Britain opened last month in London’s Marble Arch outlet. It is hiring 500 staff on top of its current 1,700 headcount, including 100 working on head office functions such as helping customers to switch accounts.
Opening the Gyle branch yesterday, M&S Bank deputy chief executive Crawford Prentice said the firm will have more than 20 branches by the end of the year and aims to have more than 50 by December 2013.
The first current accounts will go live in November, and the bank will be using the branches and the retail group’s marketing resources to attract applications. However, it has no plans to market itself to the wider public.
Prentice said: “If you are not a regular shopper in Marks & Spencer then the current account won’t appeal to you.”
The account will cost between £15 and £20 a month, depending on the package. In exchange, users get a variety of vouchers to be used in stores and at the group’s cafes.
The close targeting at an existing customer base means M&S was able to design the bank’s products and the branches using detailed consultation exercises. It built a test branch at its Chester HQ, then re-built it to match specifications set out by customers. That has led to some unusual choices: the bureau de change counters – already a feature of 120 M&S stores – remain, but will not be used for banking. Instead, the softly furnished lounge-style branches have a self-service system with staff on hand to help and a number of booths for private meetings.
There is also internet access and a telephone for those wishing to try those systems under supervision.
Customers will be given a pager and encouraged to browse the shop while they wait for an appointment, and the banks will be open the same hours as the stores, including weekends. As a consequence, each has a staff of 18.
Customers have even specified the furniture – armchairs and not sofas – and the debit cards have been designed by Sir Terence Conran.
The bank may have narrowed its appeal, but it has chosen a large niche. Marks & Spencer estimates it has about 12 million regular customers. M&S Money already has 2.7 million credit card customers and 1 million using its savings and loans.
Prentice said the new bank has not set targets for how many customers it wants to attract, but is prepared for “as many or as few customers” as it may get. Mortgages will not be launched in 2012, but soon after, he said.