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Marks and Spencer Group plc Annual report and financial statements 2013 28Strategic review
International
continued to grow our presence in
Shanghai, with the opening of seven new
stores. We now have a total of 14 stores
in the Shanghai region including our new
flagship store at Golden Bell Plaza. Our
Hong Kong operations also performed
strongly and we opened a new store in
the New Territories in January.
Our franchise operations across key
territories in the Middle East performed
well, with sales up 9.7%. We opened 19
new stores across 11 territories,
including new markets such as Georgia,
Kazakhstan and Armenia. We enhanced
our offer in existing markets, introducing
the new store format to our flagship
Bagdat store in Turkey.
Our European business was impacted by
the ongoing weakness of the Irish and
Greek economies and sales were down
0.4%. Sales in the Czech Republic
strengthened as the business responded
well to the management and structural
changes put in place last year.
Our first full line French store opened in
October at So Ouest in Levallois-Perret,
Paris and attracted over 80,000
customers in its first three days of
trading.
Multi-channel expansion
Our ‘bricks and clicks’ strategy
combines international store openings
with website launches and the latest
digital technologies. This approach
enables us to extend the reach of the
M&S brand in both new and existing
markets, as well as tailoring our offer to
local customers’ shopping preferences.
In May 2012 we shared plans to trade in
ten markets by the end of the financial
year. Following the successful launch of
our local French and Irish websites, we
made significant progress, with the
launch of a further six fully localised
European websites by April 2013.
In addition to our European e-commerce
offer, we are working closely with
international partners to benefit from
their local infrastructure and expertise to
help us explore the growth opportunities
in more complex e-commerce markets.
In January we launched an online shop
on China’s leading retail website TMall
and in February, we announced plans to
launch an e-commerce offer for the
Russian market, operated by our existing
franchise partner Fiba.
Sales in our International business
were up 4.5% to £1.1bn this year,
reflecting strong growth in our priority
markets. However, operating profit
was down 9.9%, due to the impact of
currency translation, prevailing
macroeconomic conditions and
start-up costs in key markets. We
now trade in 51 territories from 418
stores totalling 5.4m sq ft and have
further extended the reach of the
M&S brand through the launch of
new in-country websites.
Building a more international
company
Our international strategy is built around
a clear geographic focus, supported by
the right business model for each
market. We are growing our presence in
India, China and the Middle East region
including Russia and Turkey, as well as
developing a multi-channel proposition
to serve customers in Western Europe.
This approach is being delivered by a
best-in-class international management
team, comprising high calibre external
talent, M&S experience and valuable
local expertise.
We began work to improve our
international buying processes –
combining our central planning with local
market knowledge to deliver a more
tailored product offer that better reflects
local seasonality, culture and customer
profile. Supply chain improvements are
enabling us to deliver product to our
international stores more efficiently. We
trialled a new approach to product
cataloguing across our 46 Czech stores,
developing a clear customer profile for
each store and adapting the product
range accordingly. We’re extending the
use of this model to more stores.
Our specialist visual merchandising
team, combined with the roll-out of our
new store format to selected international
stores, is helping us deliver a more
aspirational and consistent store
environment for international customers.
This has been further supported through
the provision of additional marketing
support and visual merchandising
guidance to our franchise partners.
Regional focus
In Asia, we focused on driving growth in
our priority territories of India and China
and delivered a sales growth of 13%.
With our partners Reliance Retail, we
opened six new stores in India and we
International revenue
£1.1bn
4.5%
Bringing London style
to Europe
In November 2012 we
launched fully localised
websites across Spain,
Germany, Austria and Belgium.
Each site trades in Euros and
offers the preferred local
language, payment and
delivery options. In April 2013,
we added Luxembourg and
The Netherlands – taking the
M&S brand to more customers
across Europe’s fastest
growing e-commerce markets.
EX PA
Golden Bell Plaza,
Shanghai
Our new 4,500 sq m flagship
store offers over 280
exclusive fashion lines.
Bestselling items include
Savile Row Inspired suits and
per una Speziale dresses.
INTERNATIONAL HIGHLIGHTS