High street stalwart Marks & Spencer is ramping up international expansion plans with aims to open 250 stores over the next three years.
The group hopes the overseas push will grow international sales by a quarter and profits by 40 per cent as it sets its sights on fast-growing regions such as India, China, Russia, the Middle East, as well as Western Europe.
It revealed details of the global drive at an investor and analyst presentation yesterday in Paris, where it also plans to open 20 standalone food stores – making the French capital the group’s largest food market outside of the UK.
But the ambitious plans come as M&S continues to struggle in its domestic UK market, with trading figures for the final quarter of its financial year next week expected to show another decline in general merchandise (GM) sales.
The beleaguered GM division, which includes fashion and homeware, saw like-for-like sales fall 2.1 per cent over the crucial Christmas season, marking a tenth successive quarterly decline despite concerted attempts to turn around its fortunes with new senior personnel and a marketing push.
Under-pressure boss Marc Bolland is hoping a recent website revamp will help sales bounce back, while the overseas expansion comes as part of plans launched three and a half years ago to transform the retail giant into an international, multi-channel retailer.
It will also open flagship stores in major cities, supporting its ‘bricks and clicks’ approach
He said: “Our strategy of becoming an international, multi-channel retailer is more relevant than ever before because of the strong growth potential of international markets.”
M&S returned to France in 2011 after a decade away and Mr Bolland’s move to grow the retailer’s footprint has seen its overseas store estate increase to 455 from 337 when he took over at the helm in 2010.
As well as the food stores planned for Paris, M&S wants to roll out a food offering in Europe through its franchise partnerships and is expanding dedicated lingerie and beauty shops throughout the Middle East and India – areas offering “great opportunities”, according to Mr Bolland.
It will also open flagship stores in major cities, supporting its ‘bricks and clicks’ approach.
But the group revealed plans to find a local partner to help it tackle the Chinese market, while also refocusing its 15-strong estate in Shanghai on flagship and central stores.
Shares rose more than two per cent as the expansion announcement came as a welcome distraction from the woes in the UK.
But retail experts at Shore Capital Stockbrokers said: “M&S needs to keep the food, home, beauty, online and international plates spinning whilst demonstrating ongoing progress in core UK ladieswear.
“Here progress is undoubtedly being made, but it is glacial.”
Analysts expect annual pre-tax profits to fall to £626 million, which will see the 130-year-old company overtaken for the first time by rival Next, which last month announced profits of £695 million.