Marks & Spencer (M&S) has completed the sale of its store network in Hong Kong and Macau to its largest franchise partner.
Dubai-based Al Futtaim becomes the sole franchisee for the FTSE 100 retailer in the Chinese territories under the deal.
It will leave the company operating a total of 72 M&S branded stores across 11 markets in Asia and the Middle East.
M&S decided to offload the 27 stores in Hong Kong and Macau following a strategic review of its overseas business in 2016, which proposed it operate in fewer wholly-owned markets.
The company confirmed there had been no redundancies as part of the sale – the value of which was not disclosed.
The stores involved are a mixture of food-only and those which combine consumables with fashion and homewares.
M&S international director Paul Friston said: “We have substantially reshaped our International business, which has improved profitability and positioned us for growth.
“As one of the world’s leading retail operators, with strong logistics capabilities and local expertise, Al-Futtaim is the ideal partner for us to develop and grow our business in Hong Kong and Macau.”
Stephen Rayfield, vice president of Al Futtaim’s M&S division, added: “Al-Futtaim looks forward to building on our solid foundations as we continue to enrich our customers’ lives and aspirations through the provision of quality products and services in Hong Kong and Macau.”
M&S, under chief executive Steve Rowe and turnaround specialist Archie Norman as chairman, has moved to accelerate its fightback in the company’s core home market.
Image: M&S wants to cut costs as part of its efforts to drive value for investors
The plan involves bolstering its home and fashion offerings while cutting costs at the same time – bringing the shutters down on under-performing stores.
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The aim is to restore its fortunes as the darling of UK retail – its market value, currently standing at £5.2bn, slipped behind that of online fashion rival ASOS, at £5.6bn, last year.
The market capitalisation of M&S 20 years ago was £16bn.
Growing its market value will not be easy to achieve this year as the retail sector faces headwinds from the squeeze on family budgets brought by inflation outpacing wage growth.
M&S is due to report its progress over the key Christmas season on 11 January.
Analysts at Jefferies said on Tuesday they believed consumers had spent cautiously over the festive season – with online retailers on course to outperform.
The investment bank forecast like-for-like clothing and home sales would be 3% down at M&S, with food sales down 1% on the same basis compared to the last Christmas trading season.
Source: SKY News