Marks & Spencer is to slow down its overseas expansion amid concerns in the Chinese and Russian economies, the company told Reuters. M&S has been steadfastly focusing on its UK sales but had also expected to open 250 new stores overseas to bolster growth in three years. The aim was to increase international sales by 25 percent and push profit up by 40 percent
with China, Russia, India, the Middle East and Western Europe the focus.
Russia and China remain key markets for the UK-based retailer, however M&S said its overseas targets were practically unobtainable and that it would need to adjust its expansion plan over the short term, Patrick Bousquet-Chavanne, M&S's executive director of marketing and international, said.
"The world has shifted, is a different place ... The Syrian situation was very different from what it is today ... Putin had not invaded Ukraine and China was growing at close to 9 percent," he said.
"It's reasonable in that context that you would expect a different outlook on the next three years for the company, he told the newswire."
International operating profit falling 25 percent in the year ended March, compared with a UK rise of 8 percent.
"The sectors in which we trade are not luxury, so we haven't seen the same dramatic slowdown as some might have. But we have seen some softness in the numbers," Bousquet-Chavanne said.
"We're going to have to be much clearer in terms of when you look at the roll-out or roadmap about where to open stores."
Back in March M&S stated it would shutter five stores in secondary cities in the greater Shanghai area as part of its renewed strategy for China. It would focus on existing flagship stores in the largest cities and online, while growing its food business in Hong Kong.
Bousquet-Chavanne, speaking at M&S's new 5,000 sq m store in Brussels, said the retailer still planned to open a flagship store in Beijing in its 2015-16 financial year but gave no commitments beyond that.
"We're looking at places which are very much 'tier 1' ... where you have an upper middle class consumer base ... where we will do well even in the context of a slowdown in the economy," he said.
"I think it's going to be a slow growth towards full profitability [in China] and creating a consumer base that is sustainable," Bousquet-Chavanne said.