UPDATE: UK: Analysts see M&S expansion in Europe as likely
Marks and Spencer is reportedly considering reacquiring stores it sold when it exited the European Continent in 2001
Retail analysts said today (1 November) it was likely Marks and Spencer will re-enter western Europe although they remain divided on when the UK retailer will move back into markets it left almost a decade ago.
M&S sold 38 stores on mainland Europe in 2001 and, in the run-up to next week's announcement from chief executive Marc Bolland on his strategy for the business, there is fresh speculation the retailer will relaunch in selected markets across the English Channel.
According to reports in The Sunday Telegraph, M&S has "made overtures" to El Corte Ingles about taking back some of the nine shops it sold to the Spanish retailer. M&S is also said to be considering buying back some of the 18 French shops that were also let go in a deal with Galeries Lafayette.
M&S, which still has stores in European markets including the Czech Republic and Greece, declined to comment on the speculation. However, Arden Partners analyst Nick Bubb claimed the company "regretted" pulling out of France, Spain and Italy.
Bubb said a new international focus is "widely expected to be a big priority" in the Bolland's strategic update next week. He added that there is a "great opportunity" for the retailer to expand in Europe and insisted "we will see there are opportunities for growth [for M&S] outside India and China".
Meanwhile, Charles Stanley analyst Sam Hart said it "wouldn't be particularly surprising" if M&S announced plans to re-enter Western Europe.
However with the retailer operating around 300 international stores in more than 40 countries, he outlined concerns over the coherence of the company's international strategy. "Its whole international strategy seems a bit unfocused. There is no great critical mass in any one market," he said.
Additionally, he suggested a wiser strategy might be to focus international operations on a slightly smaller number of countries.
Credit Suisse analyst Tony Shiret said further international expansion was necessary for M&S but said he suggested it was "premature" to suggest the company was in talks with the owners of its former outlets.
"It will have to look abroad in the medium-term, but it's not the most logical thing for them to do right now," he added.
Hart downplayed the impact of moves back into Western Europe. "The vast majority of profits are in the UK and will continue to be the case for the forseeable future," he said.
Part two of our management briefing on sustainable packaging focuses on recycled material. As Jonathan Thomas writes, recycled products are central to the sector but the amount they are used differs b...
M&A led the news agenda again this week, with Diamond Foods' plans to acquire crisp brand Pringles, while Smithfield revealed plans to acquire Spanish meat brand Campofrio. Meanwhile, M&S published be...
Diamond Foods' move for global snacks brand Pringles was the stand-out story this week, with the US snack firm set to add to a burgeoning stable that already includes Kettle Foods. Elsewhere, Smithfie...
- Does Kraft Heinz want to swallow Unilever whole?
- Focus: Nestle CEO plan to balance sales, earnings
- Comment: Meal kits in US - don't believe the hype
- Is Mondelez's margin target hurting sales?
- Will Kellogg's DSD exit help it grow in US snacks?
- Nestle plans restructuring as 2016 profit misses
- Kraft Heinz pursuing Unilever in takeover move
- General Mills issues profit warning
- Kraft Heinz returns to organic growth, ups margins
- Kraft Heinz pulls Unilever bid