Marks & Spencer Group Plc (MKS), the U.K.’s largest clothing retailer, will re-enter France after a decade-long hiatus by opening a store on Paris’s Champs-Elysees and plans to add more outlets in and around the capital city.
The 1,400 square-meter (15,000 square foot) Champs-Elysees store will open before Christmas, selling women’s wear, lingerie and food, London-based Marks said today. The retailer, known for fashion advertised by 1960s model Twiggy and premium-priced ready meals, exited France in 2001 under then-Chief Executive Officer Luc Vandevelde as he sought to rein in costs.
Marc Bolland, who became CEO last May, said Marks & Spencer has “a place in customers’ hearts” in France and has had an “enormous” number of requests to return there. The retailer will introduce its first international website delivering across the nation and will concentrate stores in Paris selling foods like Scottish smoked salmon, tea and shortbread biscuits.
“It seems very brave,” said Simon Irwin, a retail analyst at Liberum Capital. Locating the store on the Champs-Elysees shopping and tourism boulevard “may be good for brand building, but I would be skeptical about the commercial prospects.”
Marks & Spencer said it’s in “advanced talks” with SSP Group Ltd., a U.K. franchise partner, about opening Simply Food outlets in and around Paris. The retailer is also seeking a “limited number” of larger Parisian stores offering both clothing and food in shopping malls in the coming three years.
The store at 100 Champs-Elysees will be spread over three floors, Marks & Spencer said. More than 500,000 people walk past the outlet each day, the retailer said.
The French website, which is planned to be active before the Christmas shopping season, will offer household wares like the new Conran range in addition to clothes.
The overall investment will be “relatively modest” and will be “very quickly profitable,” Bolland said on a call to journalists, without being more specific.
“We don’t expect the market to get too excited at this stage,” said John Guy, an analyst at Royal Bank Scotland Group Plc. “There is a lot to do on the domestic front and over the short term, a focus overseas may prove a costly distraction.”
Marks & Spencer rose 2.7 pence, or 0.8 percent, to 339.4 pence as of 12:06 p.m. in London trading.
‘Hundreds of Letters’
Marks & Spencer had been in France for 26 years before deciding to exit the market a decade ago as part of a plan to close 38 stores in seven European countries. Unlike the European business, the French stores had been profitable at the time of the withdrawal, Bolland said today.
“It wasn’t just about France, it was about continental Europe,” Marks & Spencer’s Executive Director of Food John Dixon said of the exit. “Customers want us back. We’ve had hundreds of letters and e-mails.”
The retailer said it plans to concentrate on Paris for the coming three-to-four years with 40,000-square-foot full-size stores in shopping malls and Simply Food outlets.
Marks & Spencer has 697 U.K. Marks & Spencer stores and 358 outlets in 42 territories outside its home market. Bolland said in November that he’s aiming for international sales excluding Ireland of 800 million pounds ($1.29 billion) to 1 billion pounds by 2014, compared with about 500 million pounds in 2010.
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