Marks & Spencer Group Plc, Britain’s largest clothing retailer, opened its first store in China as part of the company’s efforts to boost revenue outside its home market as British consumer spending slows.
The 3,700m² outlet in Shanghai is Marks & Spencer’s biggest in Asia, surpassing its store in central Hong Kong, Richard Sweet, managing director for China, said at a briefing yesterday. The shop employs about 100 workers, he said.
China’s “middle class has grown, their incomes have grown, the retail market has grown and consumption has grown,” Sweet said in Shanghai. “Every single large European clothing retailer has appeared in Shanghai. It’s not rocket science.”
Marks & Spencer has opened stores in Russia, Saudi Arabia and other countries as the weakest economic growth in Britain in 16 years erodes British consumer spending. The London-based retailer said last year it aims to get as much as 20 percent of sales from overseas in the next five years, compared with about 8 percent in the fiscal year ended March.
Revenue from British stores that have been open at least a year fell 6.1 percent in the second quarter ended Sept. 27, while international sales rose 24 percent, the company said in a statement.
Retail sales in China rose 23.2 percent in August and have expanded by 17 percent or more in the past year, according to government data.
July’s 23.3 percent retail sales growth was the fastest pace in at least nine years.
Marks & Spencer’s efforts to expand abroad may be hampered by the effects the global financial crisis has on other countries’ economies. The company said yesterday it had scaled back spending plans for the next two years.
The retailer said in July it would close its three stores in Taiwan operated with President Chain Store Corp (統一超商), less than 18 months after it entered the market.
“We thought we could have a chance at a decent business there,” Sweet said yesterday. “It didn’t work and rather than continue to invest, we withdrew.”
Taiwan is very different from China in terms of competitors and consumer tastes, he said.