Marks & Spencer intends to downsize internationally
The retailer is putting a brake on its international ambitions. New CEO Steve Rowe is planning to announce in November a series of new measures to streamline the UK retail chain, and especially to fight the decline in profits abroad. The possible closing down of the expensive Champs-Élysées store in Paris had already been mentioned by the management in the spring.
Steve Rowe has defined the retailer's losses abroad as "unsustainable", and vowed to make them his new priority. He made his position spectacularly clear in the spring, cancelling the deployment of an Amsterdam concept store only two months after the departure of his Dutch predecessor Marc Bolland, who left in April. Observers are already reckoning on the closing down of those foreign branches showing the largest operational losses.
This policy is the second stimulus imparted by the new CEO, the first being aimed at re-energising non-food sales, which slumped in the previous fiscal year. Marks & Spencer management intends to hone the apparel range and reduce its retail prices, to win over customers again.
"We continue to excel in food, but we have under-performed in clothing and homeware (...)" explained Steve Rowe in May. "We have a clear vision of the measures needed to stimulate and expand these businesses, which are our first priority (...). We are nevertheless convinced that our engagement to deliver the right products, prices and services will help the Clothing & Home business to grow once more."
In the 2014-15 fiscal year, Marks & Spencer sales were stable at GBP10.31 billion (€14.3 billion), but net profit fell by 7%. The finger was already pointed at clothing then, and the summer of 2015 was marked by the departure of John Dixon, who was in charge of non-food, and of Frances Russell, in charge of women's apparel lines.
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