Economic review

M&S completes exit from China

2018-01-12 10:18:00 (Beijing Time)         China Daily

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Pedestrians pass by a now-closed Marks & Spencer store in Beijing. The retailer closed its remaining online store on Alibaba's Tmall platform as part of its global restructuring efforts. (Photo by Wang Zhuangfei/China Daily)

British retailer closes remaining online store on Tmall platform

British retailer Marks & Spencer Group has completed its withdrawal from China by closing its remaining online store on Tmall and selling its franchise business in Hong Kong and Macao after shutting down 10 brick-and-mortar stores on the Chinese mainland in 2016.

The London-based retailer said in a text message to customers that it was closing its online stores as part of a global restructuring exercise.

In addition, the company recently confirmed the sale and franchise of its retail business in Hong Kong and Macao to the United Arab Emirates-based conglomerate Al-Futtaim Group. The sale, which was completed on Dec 30, 2017, saw Al-Futtaim become the sole franchisee for the 27 M&S stores in Hong Kong and Macao.

"We have substantially reshaped our international business. This has improved profitability and positioned us for growth," said Paul Friston, international director of M&S.

The retailer had in November 2016 embarked on a global strategy of focusing on established franchises and joint ventures, and operating in fewer wholly-owned markets.

The company had for the six month period ending November 2017 reported a 2.3 percent growth in international revenue on the back of currency gains. However, on a fixed-currency-rate basis, its revenue declined by 3.1 percent from the same period in 2016, after it decided to close down its loss-making stores.

M&S was largely present in China in the clothing section, with a limited number of food offerings. Its womenswear has lagged behind many fast fashion brands including Uniqlo, Vero Moda, Ochirly, Zara and H&M. The total size of the womenswear market in China, which was 872.8 billion yuan ($134 billion) in 2016, is expected to reach 963.2 billion yuan in 2021, according to a report by Euromonitor International.

Meanwhile, British fashion brand Topshop is opening its first flagship store in Shanghai in September. The British company, owned by the Arcadia group, said the expansion follows the acquisition of its Chinese mainland franchise by Beijing-based luxury online retailer Shangpin. Arcadia also owns the Topman, Dorothy Perkins, Miss Selfridge, Wallis, Evans and Burton brands.

The fashion brand will have more brick-and-mortar stores in first and second-tier cities of China and will further expand its online presence. The Beijing firm said it plans to open more than 100 Topshop and Topman retail stores on the mainland in the next five years.