Marks & Spencer has taken drastic measures to boost its results: the British company is to shut down 52 stores and pull out of ten countries, including China, Belgium and the Netherlands.
Exit 10 countries
The chain was already looking for ways to deal with its onerous international branch, leading to its decision to pull out of ten markets (again): apart from Belgium and the Netherlands these are China, Estonia, France, Hungary, Latvia, Poland, Romania and Slovakia. Belgian and Dutch customers however can still order M&S products via the company’s own webshop and through Zalando, the company has confirmed.
There was a 45 million pound (50 million euro) combined loss in those countries, on a 171 million pound (190 million euro) turnover. Even worse: in several markets, Marks & Spencer had to suffer losses for the fifth straight year. The chain will not leave Ireland, Hong Kong and Czechia, because its self-managed stores are profitable in these countries.
Only franchise stores
The company does not see a way to turn the situation around and make a profit and that is why it will soon shut down all of its stores. Only joint ventures and franchise stores will be possible in these markets, because that particular division of its international branch still generates a 87 million pound (97 million euro) profit. In total, Marks & Spencer has 268 franchise stores in 34 markets, with several joint ventures in India and Greece.
Its published financial results show that the chain managed a 4.993 billion pound (5.6 billion euro) turnover in the first half of 2016, up almost 1 % compared to the year before. Underlying profit dropped 18.6 % though, to 231.3 million pounds (260 million euro).