Marks and Spencer 2007 Annual Report Download - page 26

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11 STORES
INDIA
*
63 STORES
SE ASIA
*
31 STORES
CENTRAL
EUROPE
*
61 STORES
EUROPE
*
9 STORES
RUSSIA
*
27 STORES
TURKEY
*
17 STORES
MIDDLE EAST◆ 8 STORES
HONG KONG
◆ 13 STORES
REPUBLIC
OF IRELAND
KEY
◆ WHOLLY-OWNED STORES
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FRANCHISED STORES
Bahrain 1
Bermuda 1
Bulgaria 1
Croatia 3
Cyprus 9
Czech Republic 8
Gibraltar 1
Gran Canaria 4
Greece 35
Guernsey 3
Hong Kong 8
Hungary 8
India 11
Indonesia 13
Jersey 3
Kuwait 1
Latvia 1
Malaysia 2
Malta 3
Oman 1
Philippines 13
Poland 4
Qatar 1
Republic of Ireland 13
Romania 4
Russia 9
Saudi Arabia 8
Singapore 7
Slovakia 1
Slovenia 1
South Korea 17
Switzerland 1
Tenerife 1
Thailand 11
Turkey 27
UAE 5
Marks & Spencer is a well-recognised and increasingly
popular brand around the world. We see scope to open
many more stores in selected markets.
In a busy year we opened 36 new stores, most of which were
in territories where we already have a presence. We also opened
stores in new territories including Switzerland, Latvia, Slovakia
and Bulgaria as well as our biggest overseas franchise store
in Dubai.
We continue to actively manage the franchise operation and
closed a number of poorly performing stores, often moving to
larger, more profitable sites.
At the end of March 2007, we had 219 franchise stores in 34
territories and had grown our total space by over 315,000 sq ft
to nearly 1.8 million sq ft.
In the year ahead, our franchise operation will grow at a faster
pace, with around 40 more stores opening across Russia,
Eastern Europe, the Middle East and Asia. We have already
opened six new stores since April, including our first store in
Lithuania. In May, we also opened our first store in Taiwan,
which is being run as a joint venture.
We continue to own eight stores in Hong Kong – a mature
but, for us, successful market. We also see a lot of potential
in the Republic of Ireland and by the end of the year we
owned 13 stores. In May 2007, we opened a store in
Letterkenny and we will open another store in Tallaght later
in the year. By reinforcing our position in key cities, particularly
Dublin and Cork, and by moving into new areas, we will grow
the business here significantly in the next three years.
During the year, our international business recorded a 16.8%
increase in sales to £610.6m (last year £522.7m) and a 33.2%
increase in operating profit to £87.5m (last year £65.7m).
Operating profits from our franchises grew by 40.8% to
£42.1m, with sales up 21.5%. Our two wholly-owned
businesses in Hong Kong and the Republic of Ireland recorded
a 14.0% increase in sales and a 26.8% increase in operating
profit, to £45.4m.
These are good results. We believe the time is right to pick up
the pace of growth overseas. Our strategy is to focus on
markets where there’s a strong demand for our products
from a growing middle class.
Russia is a good example of this. We opened our first store
in late 2005 and now have nine stores in Moscow and
St Petersburg, with four new openings planned during 2007/08.
Where possible, we work with existing franchisees with local
knowledge and will often go into a new territory with a trusted
company we’ve worked with elsewhere. Our partner in Turkey,
for example, took us into Russia and we opened another store
with them in the Ukraine in May 2007.
24 MARKS AND SPENCER GROUP PLC www.marksandspencer.com/annualreport2007
International Retail
2004/05 2005/06 2006/07
Revenue (£m) 455.8 522.7 610.6
Operating profit (£m) 60.7 65.7 87.5
Number of stores at year end
– Owned 18 19 21
– Franchises 191 198 219
Selling space at year end (k sq ft)
– Owned 586 586 632
– Franchises 1,317 1,433 1,762 international
Dubai