Marks & ​​Spencer leaves China

In a recent article I expressed my surprise to see, on my trip to the Chinese capital, so many empty shopping centers. In particular, I was surprised by the apparent slack sales in more upscale luxury locations, while I noticed that more competing brands (Zara, Uniqlo, H & M) had many more buyers. This perception is reaffirmed by the news of the imminent closure of Marks & ​​Spencer of the main Chinese cities.

The case of the store that will close at the mall The Place is particularly serious, as it does a single year after its brand new opening. Costas Antimissaris, then director of international expansion at M & S, said: «Beijing is an exciting market for M & S where we have already seen strong online demand for our high quality products. We are delighted to have secured a prime location for our first store in the capital, where we are taking our shopping experience to Beijing´s customers. With our latest offering of clothing and food and our new inspiring international store environment, we are looking forward to welcoming customers to our new flagship in China”.

M&S opened for the first time a store in China in 2008 and the one of Beijing was already the tenth one in the country. The closures will affect all establishments in China, although they retain, for the time being, those located in Hong Kong.

Fruitful online business.
Likewise, M & S will continue its online expansion in China through its TMALL, a website in co-ownership with online giant Alibaba. Company sources are confident that online shopping will continue to grow in magnitude and relevance, as Chinese customers are given more options and more convenience through their online shopping. M & S launched TMALL in 2012, and has enjoyed strong demand, with sales growing double-digit compared to last year, especially in children’s fashion. Its scale, logistics and local expertise TMALL will help M & S reach customers across China in a more efficient way.

Adam Colton, Managing Director of Marks & Spencer for China said: «The decision to close our Chinese stores was driven by the fact that these establishments continue to make losses and because we have a low brand awareness there.» The store closure plan is part of a major cost-cutting unit, with M & S having announced the closure of 52 owned stores in 10 markets last year. These include seven in France, as well as in Belgium, Estonia, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia. More than 2,000 jobs are at stake in the British company. M & S’s future expansion strategy will go through a franchise-based model. Competition from brands such as H & M, Zara or Primark has negatively affected, as we have seen, the company’s financial statements.

Conversion in the UK.
Marks & Spencer is closing 30 UK stores and committing the redevelopment of 45 in more single-feed stores as part of an in-depth business review that will drastically reduce the amount of space devoted to fashion, which is not giving the desired sales figures. The company has not yet disclosed which stores will close and which will change to focus on premium food.

Disclosure: The Luxonomist is not responsible for the views expressed in the article. The text has been written freely expressing their own ideas, without receiving any compensation. The author has no business relationship with any of the companies whose shares are listed in this article.