British retail chain Marks & Spencer is suffering from dwindling sales not only on its home turf but also overseas, and new chief executive Steve Rowe has had enough.
According to The Telegraph, Rowe is making Marks & Spencer’s international store base his next priority after claiming that a decline in overseas profits was “not sustainable.”
The retailer’s annual report, released in June, revealed that revenue in its international arm—comprising 468 stores across Europe, Asia and the Middle East and an online presence in 21 markets—decreased 2 percent in the year ended Apr. 2 to 1.1 billion pounds ($1.4 billion). Chairman Robert Swannell said this decline was due to currency fluctuations, the slowing global economy and geopolitical unrest, as well as some operational challenges.
“Although we saw good growth in India, our business in Europe is not producing satisfactory returns. We are looking at every part of our international business to make sure our strategy remains relevant,” he said.
The Telegraph now predicts Marks & Spencer will exit European cities that have expensive rents, such as its Parisian store on the Champs-Élysées, but the retailer refused to comment on the rumor. Rowe is expected to update shareholders on his international strategy, in addition to plans for Marks & Spencer’s U.K. store portfolio, in the fall.
As he said in retailer’s annual report, “I want M&S to play a leading role in the future of U.K. and international retailing, and I want it to have a clear and sustainable path.”
In the last year, Marks & Spencer introduced a boutique in-store format at its new Brussels flagship and rolled out the concept to a handful of stores in Asia, including its first store in Beijing. The retailer also opened eight new stores in India and the country now has the largest number of Marks & Spencer locations outside the U.K.