LONDON — Marks & Spencer has revealed that it’s in talks with the Dubai-based conglomerate Al-Futtaim group for the potential sale and franchise of its retail businesses in Hong Kong and Macau.
Al-Futtaim already operates 43 M&S stores across the Middle East, Singapore and Malaysia. The deal would see the group purchasing all directly operated M&S retail stores in the regions and becoming the sole franchisee of M&S, in both Hong Kong and Macau.
“M&S and Al-Futtaim share values, and an approach that focuses the customer at the heart of our businesses,” said Stephen Rayfield, Al-Futtaim’s senior managing director, fashion and lifestyle division. “Al-Futtaim looks forward to building on our solid foundations through the provision of quality products and services in Hong Kong and Macau — these are among M&S’ most successful and important international markets.”
The discussions involve a period of due diligence, which is expected to take several months to complete. The stores will continue to operate throughout this period.
The decision to explore franchise options follows on from the strategic review of the M&S Group’s international business last November, where the company proposed to shift the focus on fewer wholly owned markets as it saw profits plummet.
The retailer reported a 91 percent slide in first-half profits to 15.9 million pounds last year. As it restructures under new chief executive officer Steve Rowe, M&S plans to shutter stores across 10 more international markets.
“In November we set out our plans to create a more sustainable, profitable and customer-centric international business for M&S by focusing on our established partnerships,” said Paul Friston, Marks & Spencer’s international director. “Al-Futtaim is a key partner to M&S in Asia and the Middle East and we are both committed to putting the customer at the heart of everything we do. With significant scale and retail expertise in the region, we are looking forward to discussing the potential extension of our partnership to Hong Kong and Macau as we continue to grow and develop our business together.”