Business

Marks & Spencer Pulls the Plug in China After Less Than 10 Years

By | Mar 15, 2017 03:07 AM EDT
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Marks And Spencer Expected To Re-structure Their Core Business

People walk past a branch of Marks and Spencer in Oxford Street on November 7, 2016 in London, England. (Photo : Getty Images)

Marks & Spencer has pulled the plug of almost all of its prestigious 10 branches in mainland China since the start of the year, the retailer confirmed.

The company said that it has shut down seven of its stores in January in Shanghai and Beijing, and another two last month. Another three branches in Shanghai are scheduled to be closed by April 1.

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"Our decision to close our Chinese stores was driven by the fact that our stores continue to make losses and we have low brand awareness," Adam Colton, managing director of Marks & Spencer China, said, admitting that market share growth is a challenge.

The exit comes less than 10 years after the brand entered in the Chinese market in 2008. The decision was first announced last November, together with a raft of international store closures. The closure is also part of Marks & Spencer's plan to cut some of its expenses. The company had to announce the closure of 52 wholly-owned stores in 10 markets in 2016, including France, Belgium, Estonia, Hungary, the Netherlands, Slovakia, Poland, and Romania.

However, Marks & Spencer will not totally abandon China as it will keep its Hong Kong branches open. It will also continue its online expansion across China via the Alibaba-owned shopping website TMall.

"Online shopping continues to grow in scale and relevance as Chinese customers look for more choices and greater convenience," Colton said, noting that the company saw a strong double digit growth of 11.11 percent since it launched its online platform in December

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