Bloomberg, 2nd November 2016
Marks & Spencer Group Plc plans to close some of its Chinese stores as Chief Executive Officer Steve Rowe backs away from loss-making international operations, according to a person familiar with the matter.
The closures will be announced on Nov. 8 when Rowe updates investors on his plans for the chain’s international businesses, said the person, who asked not to be identified as the plans aren’t yet public. A company representative declined to comment.
The move to scale back in China after eight years there comes amid a broader cost purge by the U.K.’s largest clothing retailer. Rowe will also say next week that he plans to close M&S’s flagship Paris department store on the Champs-Elysees, a person familiar with the matter has told Bloomberg. M&S is also scrapping about 525 head office jobs as Rowe seeks to resurrect sales in the retailer’s clothing business.
Marks & Spencer opened its first Chinese store in Shanghai in 2008 under then-CEO Stuart Rose. Last year, Rose’s successor Marc Bolland closed five smaller regional stores and focused the company’s efforts on Shanghai. M&S currently has ten stores in China, according to its website. It also sells products through Chinese e-commerce sites TMall.com and JD.com.
“M&S have gotten everything wrong in China,” said Paul French, an independent consultant to western brands in China. “Their U.K. customer base doesn’t really exist there. It’s a more aspirational culture and Britain’s high-end brands have fared better.”