Marks & Spencer plans to close all stores in Chinese mainland after profits plunged
By and Published: Nov 09, 2016 01:43 PM
UK retailer Marks & Spencer announced on Wednesday that it will pull out of the Chinese mainland market and close all the 10 stores amid shrinking profits, according to a statement the company sent to the Global Times on Wednesday.
"Our review has shown that our stores in Chinese mainland continue to make losses and as result we can no longer trade with a store presence in the Chinese market," Adam Colton, managing director of Greater China at Marks & Spencer, said in the statement.
The company didn't disclose sales revenues in the Chinese mainland market.
An employee at an Marks & Spencer store in Beijing told the Global Times on Wednesday that he feels sorry about the closures because business in Beijing was quite good and there were a lot of loyal customers. He did not know when his last day of work would be. The 1,500-square Beijing flagship store at the Place shopping mall was opened in December 2015.
Intensified competition and relatively high prices were the main reasons behind Marks & Spencer's retreat from Chinese mainland, experts noted.
"In Chinese mainland, the traditional UK brand did not have much appeal for Chinese consumers. For example, the prices in its food shops were a bit more expensive than even imported food stores," Wang Xinmiao, a Beijing-based retail industry analyst, told the Global Times on Wednesday.
In addition, the company did not have much time to cultivate brand awareness and a loyal customer base because the Chinese apparel market had already been saturated with "fast fashion" international brands, such as Zara, H&M, GAP, and Uniqlo, which marched into the Chinese mainland market much earlier than Marks & Spencer, Wang said.
In contrast, the UK retailer has built a profitable wholly-owned business in Hong Kong in large part because it entered the market as early as 1988, the statement noted. Marks & Spencer is planning to expand its business in Hong Kong by opening more food stores in the near future.
A customer said he came on purpose to the Beijing shop here after he has known the closure news. He has lived in UK for years and he trusts M&S, and he will shop in Hong Kong after the end of business here.
The UK retailer has been losing ground in other international markets. In addition to its closures on the Chinese mainland, the company outlined plans to shutter 53 stores in 10 international markets, including seven in France, while pulling out of Belgium, Estonia, Hungary and Lithuania.
In the first half of 2016, the company's pre-tax profit plummeted 88 percent to 25.1 million pounds ($ 31.39million), down from 216 million pounds in the same period a year ago, the BBC reported on Wednesday.
"Our review has shown that our stores in Chinese mainland continue to make losses and as result we can no longer trade with a store presence in the Chinese market," Adam Colton, managing director of Greater China at Marks & Spencer, said in the statement.
The company didn't disclose sales revenues in the Chinese mainland market.
An employee at an Marks & Spencer store in Beijing told the Global Times on Wednesday that he feels sorry about the closures because business in Beijing was quite good and there were a lot of loyal customers. He did not know when his last day of work would be. The 1,500-square Beijing flagship store at the Place shopping mall was opened in December 2015.
Intensified competition and relatively high prices were the main reasons behind Marks & Spencer's retreat from Chinese mainland, experts noted.
"In Chinese mainland, the traditional UK brand did not have much appeal for Chinese consumers. For example, the prices in its food shops were a bit more expensive than even imported food stores," Wang Xinmiao, a Beijing-based retail industry analyst, told the Global Times on Wednesday.
In addition, the company did not have much time to cultivate brand awareness and a loyal customer base because the Chinese apparel market had already been saturated with "fast fashion" international brands, such as Zara, H&M, GAP, and Uniqlo, which marched into the Chinese mainland market much earlier than Marks & Spencer, Wang said.
In contrast, the UK retailer has built a profitable wholly-owned business in Hong Kong in large part because it entered the market as early as 1988, the statement noted. Marks & Spencer is planning to expand its business in Hong Kong by opening more food stores in the near future.
A customer said he came on purpose to the Beijing shop here after he has known the closure news. He has lived in UK for years and he trusts M&S, and he will shop in Hong Kong after the end of business here.
The UK retailer has been losing ground in other international markets. In addition to its closures on the Chinese mainland, the company outlined plans to shutter 53 stores in 10 international markets, including seven in France, while pulling out of Belgium, Estonia, Hungary and Lithuania.
In the first half of 2016, the company's pre-tax profit plummeted 88 percent to 25.1 million pounds ($ 31.39million), down from 216 million pounds in the same period a year ago, the BBC reported on Wednesday.
