(qlmbusinessnews.com via telegraph.co.uk – – Wed, 30 Aug 2017) London, Uk – –
Marks & Spencer is taking further steps to overhaul its overseas businesses by starting talks to sell its shops in Hong Kong and Macau to a Dubai-based conglomerate.
The British retailer has been in Hong Kong for almost three decades and now has 27 shops in the region and Macau.
Marks & Spencer said that the talks with Al-Futtaim follow its strategic review of its international businesses last year, which signalled a greater focus on franchise and joint ventures rather than wholly-owned stores.
Al-Futtaim, which already operates 43 M&S shops across seven markets in the Middle East, Singapore and Malaysia, is expected to purchase and enter into a franchise contract to continue running the Hong Kong and Macau stores.
The move follows Marks & Spencer's announcement last November that it would close 53 loss-making international stores and exit 10 markets, including mainland China, after boss Steve Rowe announced that he would be switching focus to a franchise overseas business.
Mr Rowe last year sought to soothe shoppers in Hong Kong, where there is a strong British expat community,who feared that shops in the region would be closed and commented on the regions “loyal” customer base. However, this year's annual report reveals that sales in Hong Kong were affected by its move to reduce the level of discounting while it had to invest heavily in refurbishing some stores .
Mr Friston said that Al-Futtaim was a “key partner to M&S”. In April the Dubai-based conglomerate which has retail, property, financial and automative investments, opened a giant flagship M&S store in Doha, which includes a table-waited cafe serving fish and chips and afternoon tea to Qatari customers.
“With significant scale and retail expertise in the region, we are looking forward to discussing the potential extension of our partnership to Hong Kong and Macau as we continue to grow and develop our business together”, he added.
Marks & Spencer currently has 454 international stores across 55 countries.
By Ashley Armstrong