M&S expansion plans dented by Chinese economic concerns and tension between West and Russia
3 min read
13 October 2015
Clothing giant Marks & Spencer (M&S) is sounding the retreat on its international expansion plans in the wake of recent events in Eastern Europe and China.
Marc Bolland, CEO of M&S, has announced that he is curbing the company’s ambitions of opening 250 stores overseas within three years.
This follows on from detailed plans in 2014 to grow the company’s current 455 stores around the world as it continues to struggle in the UK market. He told investors that fresh food, beauty and lingerie offered “great opportunities” for international expansion – which was echoed by executive director Steve Rowe, who claimed that “Britishness is as saleable as ever in any part of the world.”
However, marketing and international director Patrick Bousquet-Chavanne recently admitted that the three-year goal was now unattainable, saying the global climate was different from when the announcement was made.
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He said: “The world has shifted. The Syrian situation was very different from what it is today. Putin had not invaded Ukraine and China was growing at close to nine per cent. It’s reasonable in that context that you would expect a different outlook on the next three years for the company.”
The retreat will put a further dent in its ambition to open 250 new stores overseas by 2017, which is already behind schedule. The retailer intends to pull out of Croatia, Bulgaria, Montenegro, Serbia and Slovenia, at the beginning of January 2016.
Furthermore, expansion in China has been tempered by uncertainty over economic growth.
But the company still has big plans in mind as in May it launched a new store design in Belgium – which will act as a template for its global opening programme.
The company said: ‘We continue to closely manage our international business and take decisive actions as necessary to ensure our store portfolio is fit for the future of M&S.”
It said the stores ranged from 3,000 to 16,000 sq ft, adding that the change would “enable [it] to firmly focus on other successful businesses in eastern Europe”, including Poland, Hungary and Romania.