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.
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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.
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By GlobalDataHowever 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.
