New M&S chief to wield axe on foreign stores
THE new boss of Marks & Spencer is planning a U-turn on his predecessor’s foray overseas.
Steve Rowe is reviewing the future of its international shops and is keen to ditch expensive leases signed during Marc Bolland’s reign as chief executive.
Rowe (pictured) took over the struggling high street retailer in April and has launched a new strategy to improve sales of its failing womenswear collection, which this summer recorded its worst performance for more than a decade.
The new chief executive is expected to update the market on shop closures alongside the outcome of his strategic review, which will be announced at its half-year results in November.
Five years ago, Bolland announced a return to Paris amid much fanfare after taking the helm in 2010. He later opened new shops across Paris, and in the Netherlands and agreed franchise deals in multiple regions.
Bolland returned the 132-year old British retailer to Paris after a decade’s absence.
It had a profitable Paris store on Boulevard Haussmann, but it closed its entire continental network of 38 shops in France, Spain and Germany in 2001 despite internal resistance.
Now Rowe, 48, could drastically reduce M&S’s overseas shops again, particularly those with expensive rents in cities such as Paris.
One property source said: ‘Its clothes stores in Europe are struggling and it got into very expensive leases that are causing it problems. It is looking at how many it can close.’
Rowe, an M&S lifer who began his retail career in its store in Croydon, south London, age 15, took direct control of its international division this year.
The 468 overseas shops are a mixture of company owned, franchised and licensed and stretch from Paris to India and China.
M&S food stores in many outposts have been trading well. Food sales overseas grew by 23.4pc in the last year but M&S described its clothing and home furnishings sales overseas as ‘not satisfactory’. In its annual report earlier this year, it said: ‘We are looking at every part of our international operations to make sure our strategy is fit for the future.’ M&S admitted there had been a deterioration in trading in locations including Greece, France, the Czech Republic and Hungary. It is also expected the firm will reduce shop numbers in the UK, particularly on high streets where it has older stores. It has 914 shops across the country and experts suggest this should be closer to 700 ideally.
Retail analyst Nick Bubb said: ‘It is pretty clear that they have too much clothing space and that they need to rebalance the business more towards food.’
The closures in the UK will hit struggling high streets that are already reeling from the closure of the 150-plus BHS store chain, which shut its doors for the final time yesterday.
M&S has hired a new property boss to join property director Hugo Adams’s team to deal with its leases. Steven Bennett, previously at Travis Perkins and Carphone Dixons, joined last month.