M&S leaves China’s high streets as it turns focus to TMall
Marks & Spencer has closed seven of its 10 stores in mainland China this year, with the remaining three set to close in April as part of a major cost-cutting strategy announced by CEO Steve Rowe last year.
Falling sales and low brand awareness have forced the British retailer to pull out of Chinese high streets, where it was based in major cities like Shanghai and Beijing since first entering the market in 2008.
According to reports, the company’s managing director for Greater China, Adam Colton, said the continued losses across the Chinese stores were a key reason for the China exit. “Growth in market share is also challenging,” he added.
But while the company’s department stores will disappear from the high streets, Chinese customers and British expats in China will continue to find M&S products on TMall, the online business-to-consumer platform owned by Alibaba.
M&S launched on TMall in 2012, and has enjoyed strong customer demand for its products online, said Colton. Sales grew by double digits on last year’s Singles Day, the deal-focused online shopping festival, and the retailer saw its best ever performance in kidswear.
TMall’s scale, logistics and local expertise will help M&S reach customers across China in a more efficient way.
The company has also said its stores in Hong Kong will not be affected by the store closures. It announced in November last year that it would be exiting its lossmaking owned business across 10 international markets this year to focus on growing the network of franchise shops.
The company closed several stores in France, Belgium, Estonia, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia last year.
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