Marks & Spencer can’t seem to figure out China.
Following speculation last week that the British retailer plans to shut its pricey Parisian flagship store, a source told Bloomberg that its 10 Chinese stores are at risk of closure, too. Neither allegation has been confirmed.
Marks & Spencer chief executive Steve Rowe has made no secret of his intent to scale back internationally and he’s expected to update investors on his overseas strategy on Nov. 8.
It’s been 20 months since the retailer acknowledged its troubles in China, announcing in March 2015 that it would close five of its stores in the greater Shanghai region by that August, and that Bruce Findlay, regional director for Asia, had stepped down. At the time, there were 15 Marks & Spencer stores in China. Today, there are nine in Shanghai and one in Beijing, in addition to e-commerce on Tmall and JD.com.
Despite the retailer’s intent almost two years ago to enter new cities in China, Rowe reportedly has other ideas in mind.
“M&S have gotten everything wrong in China,” Paul French, an independent consultant to western brands in China, told Bloomberg. “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.”
It’s not just China. Marks & Spencer’s international revenue declined 2 percent in the year ended April 2 to 1.1 billion pounds ($1.4 billion), which chairman Robert Swannell blamed on currency instability, the slowing global economy and geopolitical conflict, as well as some operational challenges.
Rowe has been working to turn around the business since he took up the helm in April, cutting more than 500 head-office jobs and 400 IT and logistics jobs in September. Marks & Spencer’s international director, Costas Antimissaris, left the company in June after two years in the role. He was replaced by Paul Friston, former CEO Marc Bolland’s executive assistant and the interim chief financial officer between July 2014 and April 2015.