British retail giant Marks & Spencer (M&S) is revamping its China plans, which could include creating a partnership with a Chinese company.
Taking a cue from rival British retailer Tesco, which partnered with state-run China Resources Enterprises in order to return its 131 stores in mainland China to profitability, M&S hopes to have a similar turnaround with a Chinese partnership, reports RBR.
M&S managing director for greater China Stephen Rayfield said the company’s goal is to “work with a strong partner with excellent local experience and expertise and accelerate growth across China.”
“The change of strategies reflected the challenges for global retailers in China where they face fierce competition and difficulty to target right consumers with right products,” said Stephen Chen, an analyst with Tianyi Investment Consulting, a private research firm. “Seeking a local partner is a better choice and a candidate with some e-commerce background may be ideal.”
Rayfield tells The Standard that “sales in Asia last year rose 15.7 percent. There were strong results in Hong Kong, while the flagship Shanghai stores continued to perform well.” However, there have been rumors that one third of its Shanghai stores will close.
Since entering the Chinese market in 2008, Marks & Spencer has opened 15 stores in greater China, with seven in Shanghai alone, and the stores are wholly owned by M&S. The company plans to close 5 stores in second and third-tier cities and open new ones in Beijing and Guangzhou. The company launched online stores on Taobao last year.
image source: simon q