Marks and Spencer 2009 Annual Report Download - page 43

Download and view the complete annual report

Please find page 43 of the 2009 Marks and Spencer annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

39
We will continue to grow in a measured way,
learning from each market before ramping up
expansion. We are adapting our ranges,
introducing smaller sizes in womenswear
and shorter shirt sleeves in menswear, as
we do in Hong Kong.
Our strategy requires us to make tough
commercial decisions and be disciplined.
While we are expanding in China, earlier in the
year we closed our stores in Taiwan where our
trial did not perform to a level that warranted
further investment.
Elsewhere the response to lower pricing
gives cause for encouragement, despite
trading conditions. Our franchise businesses
in Indonesia and Thailand in particular have
seen very positive growth.
Southern and Eastern Europe
The market in Eastern Europe traded well
up to last summer – but softened in patches
thereafter. Our strongest market was Russia,
where we opened four new stores, and
achieved high like-for-like sales growth.
The Czech Republic and Poland also held up
well, although have softened since Christmas.
In October we brought the Polish franchise
business into our Czech subsidiary for £1.9m.
We opened two stores in Poland, five stores
in the Czech Republic, and three in Slovakia
during the year.
We have made strong operational
improvements in Greece with our subsidiary
partner Marinopoulos Group. We have
improved the breadth of our ranges and
lowered prices as well as instigated plans
to tighten up supply chain performance.
These actions have helped mitigate against
the weak consumer market and the impact
of recent unrest in Athens, as well as support
the growing business with six new stores
opened during the year.
Ireland and the Channnel Islands
In the Republic of Ireland, one of our most
extensive overseas markets, we opened a
14,000 sq ft store in Killarney, taking the total
portfolio to 18. However trading conditions
remained tough as a result of worsening
economic conditions.
Indian subcontinent
As reported last year, while we have traded in
India for a number of years through a franchise
agreement, in view of the long-term
opportunity, we set out to find a partner who
could help us grow in the market. In April 2008
we formed a 51:49 subsidiary with Reliance
Retail and on 31 March 2009 acquiring
Supreme Tradelinks, our former franchise
partner, and its 14 M&S stores. In April 2009
we opened a new store in Mumbai. We remain
on track to open 10 to 15 stores within the
next two years.
Middle East
The Middle East bucked the general trend,
and performed strongly through the year.
Conditions have worsened recently but a
phased opening programme of four new large
stores will ensure that the business continues
to grow through 2009/10.
Mediterranean
Our franchise partner in Gibraltar is opening
a 10,000 sq ft store in Marbella, selling the
full range of M&S clothing, as well as
homeware and food. The store, which
will service the large expatriate community,
will open in September.
Looking ahead
The bursting of the property bubble and a
weak pound will benefit our International
business. This means that in the short term
we will continue to secure stores on more
favourable rental terms, extending our
footprint at comparatively reasonable costs.
Most of our overseas businesses buy from
us in sterling, which makes products cheaper
for them, so they can pass that saving on
to the customer. As in the UK our long-term
plan will be flexed to accommodate the
changing market environment.
125 YEARS OF QUALITY
Above: Shanghai store Trading over four floors,
our Shanghai store has one of the widest food
ranges of M&S International stores, with 1,000 lines
including a full wine shop, grocery products and
frozen lines.
125 YEARS OF QUALITY
Below: Chilled to frozen During the year we
introduced our ready-meals to 27 of our International
stores. The meals are especially frozen and include
Chicken Kiev and our chocolate melting middle
puddings. We are now extending the range and
the number of countries stocking these products.
Southern and
Eastern Europe
136 stores
23 stores opened in the region
Far East
76 stores
Flagship store in Shanghai
opened in August 2008
Middle East
20 stores
3 new stores opened in 2008/09,
with 4 planned in 2009/10
Mediterranean and Islands
21 stores
Including a new store
in Marbella
Other: Bermuda
1 store
Indian subcontinent
14 stores
First non-franchised store opened
in Mumbai in April 2009
Our International operations
Ireland and Channel Islands
28 stores
1 new store in 2008/09