Marks & Spencer to expand online in bid to revive overseas business

Marks & Spencer's profitability has been falling for years, hurt by a long-struggling clothing and home division, and wider structural changes in the highly competitive British market. Its international business has also had a mixed record over the p
Marks & Spencer's profitability has been falling for years, hurt by a long-struggling clothing and home division, and wider structural changes in the highly competitive British market. Its international business has also had a mixed record over the past decade.PHOTO: REUTERS

LONDON • Marks & Spencer (M&S) Group will launch websites in 46 new overseas markets to try to revive an international business that has languished for years despite multiple turnaround efforts.

The British seller of food, clothing and housewares said the expansion into nations from Nepal to Bolivia to Uzbekistan would extend its online reach to more than 100 countries in a cost-effective way.

Mr Paul Friston, international director at M&S, said online sales to customers abroad have been soaring since the start of the pandemic, jumping by 75 per cent in the first half of last year alone as more people worldwide favour shopping from home.

The new websites will offer a range of clothing and home products, with orders fulfilled through the company's existing distribution network.

The push will allow the retailer to "explore underlying demand in these markets without significant upfront investment", Mr Friston said in a statement.

A household name in Britain, M&S sells both online and through hundreds of stores across the country. Profitability has been falling for years, however, hurt by a long-struggling clothing and home division, and wider structural changes in the highly competitive British market.

Its international business has also had a mixed record over the past decade, with the brand's franchise arm generally performing better than wholly owned stores.

In 2011, under former chief executive Marc Bolland, M&S returned to France with much fanfare after a 10-year absence. It opened a flagship store on Champs-Elysees in Paris, which Mr Bolland heralded as a symbol of its success abroad.

But within several years, the retailer was in retreat. It shut that store, along with scores more unprofitable outlets across Europe.

In the past decade, operating profit in M&S' international division has fallen from £147 million to just over £110 million (S$205 million) on revenue that has largely hovered around £1 billion.

Mr Steve Rowe, the CEO leading the latest turnaround effort, said last May that the retailer had completed the first phase of transforming the international business by moving away from direct ownership to a franchise and joint-venture model.

Now, the focus is on "localising ranges, reducing prices and developing sales online globally", he added.

BLOOMBERG

  • 75%

    Jump in Marks & Spencer's overseas online sales in the first half of last year, amid the Covid-19 pandemic.

    $205m

    Or £110 million, operating profit in M&S' international division, down from the £147 million recorded 10 years ago.

A version of this article appeared in the print edition of The Straits Times on March 09, 2021, with the headline 'Marks & Spencer to expand online in bid to revive overseas business'. Subscribe