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Marks and Spencer Group plc Annual report and financial statements 2010 Directors’ report 32
Where we sell
International
Growing our international business
In 2007/08 we set a target to grow our
International business to between 15 to 20%
of total Group Revenue within five years and
over the last 12 months we have focused
on four key elements to help us achieve
this namely:
growing our Central and Eastern European –
partnerships;
building sustainable businesses in India –
and China;
accelerating growth with our franchise –
partners; and
continuing to explore new opportunities. –
This year we have continued to expand our
global footprint. We now have 327 stores in
41 territories (includes Republic of Ireland),
with the average square footage of our
international stores increasing from 10,773
to 11,129.
Our International business model is made
up of partly and wholly-owned subsidiaries
and franchises. This broad spread of
ownership models and countries has enabled
us to perform well throughout a difficult
global economic environment even when
individual markets have been impacted.
Improving efficiency
Operational efficiency is key to building a
platform for growth. The introduction of our
International Range Planner last year has
improved our ability to tailor the product
offer for individual markets. It enables us to
plan for regional variations and accurately
stock the right colours and sizes to meet the
specific needs of our international customers,
responding to seasonal requirements in
Russia or greater colour variations in India
for example.
Improvements in our supply chain have
enabled us to move products through
our network faster and more efficiently.
We now move over 21% of our stock
through our four international hubs in Hong
Kong, Singapore, Sri Lanka and Istanbul
direct to their destination, as opposed to
shipping international stock via the UK.
PARTLY OWNED
Indian subcontinent
Expanding our Indian operation with our
partner Reliance Retail has enabled us to
transform our position in the market.
Under our previous franchise relationship
we were a small premium retailer selling UK
products at higher prices from small stores.
Through our partnership with Reliance Retail
we have been able to open larger stores and
realign our prices by locally sourcing up to
38% of our products, with an aim to reach
over 60% by 2012. Local sourcing provides
us with the flexibility to respond to market
needs, for example in India pockets on
shirts are common, as jackets are rarely
worn in the heat, so we add these to locally
sourced shirts.
We have opened four new stores in
India this year, giving us a total of 16 stores.
We now have a strong platform in place from
which to significantly expand our presence
in this market.
India presents us with a huge opportunity
– with a population of 1.2 billion and economic
(GDP) growth at 7.2%. With the right product
and the right partner we are well placed to
take advantage of this.
During 2009/10 sales in our International business grew by 5.7%, accounting
for 10.2% of total Group revenues. This year we have focused on developing
our partnership in India and growing our Central and Eastern European
business. Over the last 12 months we have invested in our operational
capabilities, resulting in a better product offer, tailored to meet the needs
of specific markets, as well as building a platform for future growth.
SERVICE
Above: Product tailoring In India we sell polo
shirts in three times the number of colour variations
as we do in the UK, to cater for the local market’s
taste for bright colours.
SERVICE
Above: International mystery shopping
This year we rolled out our successful mystery
shopping programme to our international stores.
We produced a tailored service manual and have
seen continued improvement across the year,
with scores now at 80% and we will be keeping
up this momentum with regular visits.
SERVICE
Above: Fresh food Trading from 1,400 sq ft,
the new standalone food store in Wan Chai, Hong
Kong offers over 800 food and drink products.
300 of these are fresh chilled foods, including
a choice of traditional British and international
ready meals such as Italian and Indian. The store
also boasts an in-store bakery that freshly bakes
pastries and bread each day.
M&S International sales*
£949.4m
+5.7%
M&S International as a share of Group revenue
10.2%
+0.3% pts
* 52 weeks.