Reshaping of Store Portfolio
MARKS & SPENCER PLC
9 July 1999
MARKS & SPENCER RESHAPES CONTINENTAL EUROPEAN
STORE PORTFOLIO
Marks and Spencer p.l.c. today announced that following a
review of store locations and footage throughout Continental
Europe it has informed staff of its intention to close four of
its stores in Germany and a further two in France. This re-
shaping is part of the company's determination to develop a
successful and profitable international business focusing in
Europe on prime sites and locations. The company has begun
consultations with the appropriate National Works Councils and
staff on the planned changes to the Continental European
chain.
In addition, the Paris-based country office, which covers
operations in Belgium and Luxembourg as well as France will
reduce its administrative staff as a result of streamlining
decision making and devolving responsibility back out to local
teams and managers.
The store review is one part of a four point action plan
announced in May aimed at building the Marks & Spencer brand
on the Continent, taking greater account of local customer
differences and needs. Good progressis being made with these
initiatives, laying the foundations for growing the business
in the years ahead.
A review of pricing and competitiveness has confirmed
that the Marks & Spencer brand now represents excellent value
for money.
All key decisions are now taken by local management, an
increasing proportion of whom are nationals; the number of UK
nationals in European management has fallen to twelve from
forty in recent years.
A small European buying division has been established to
ensure the European stores will have access to the most
appropriate ranges, drawn from the well-received Autumn
fashion collections previewed this week. Going forward this
division will also source any additional products required by
the local markets.
Following the re-shaping of its store chain, including planned
developments, Marks & Spencer will operate 36 stores in
Continental Europe - 18 in France, 9 in Spain, 4 in Belgium,
2 in Holland, 2 in Germany and 1 in Luxembourg. The company's
strategy in Europe is to build its business firstly on its
larger, prime sites in major cities like Paris, where the
store on Boulevard Haussman will be further extended and other
centres such as Brussels, Madrid and Cologne. In addition to
these existing stores, new stores will open this Autumn in
Plaza Catalunya, Barcelona and on the Zeil in Frankfurt.
Outside these major city centres, the company will concentrate
on well-located and appropriately-sized stores which generate
strong footfall.
The stores which Marks & Spencer has announced its intention
to close have all been trading significantly below
expectations. The stores in Germany include Essen, Dortmund
and Wuppertal, which were bought as a group in 1997 from a
local retailer, as well as a store in Frankfurt Nord West
Zentrum, a shopping centre near Frankfurt. The stores in
France are in Marseille Grand Littoral (out of town) and in
Rouen. In total 310 people will be affected including 24 from
the Paris country Office. Consultation with the local Works
Councils will begin as soon as possible and Marks & Spencer
will assure staff of its commitment to providing as much
support during this process as possible. It is expected that
all the staff in the existing store in Frankfurt will take the
opportunity to move to the planned new store on the Zeil.
The total cost of the proposed closures will amount to
approximately £17 million in the current financial year, net
of provisions previously taken. It is estimated that based on
current trading levels, the company's results will be improved
by £10 million over a full year.
Commenting on today's announcement, Guy McCracken, Managing
Director of Overseas Retail for Marks & Spencer, said,
'Continental Europe is a huge consumer market and success in
that market is an essential part of our future. The stores
which we intend to close - 6 out of the 42 we have across the
Continent - are not appropriate for our future needs.
' Of course we regret the job losses, not least because the
staff at all these stores and at our head office in Paris have
all shown great determination and loyalty in helping us to
develop our European business. We will endeavour to do
everything in our power to support them through this process.
'I said in May that we were taking action to lay the
foundations for the future. In addition to reshaping our
store portfolio we have given local management full
accountability and have established a dedicated buying team
which is now getting up to full speed. It will take time to
maximise the benefits but I am confident that our actions will
help secure a strong and successful European business.'
For further information:
Mark Ashman: 0171 268 2217
Gill Ackers: 0171 268 6560
Jane Lowe: 0171 268 6656
Notes for Editors - details on Europe attached.
Notes to Editors:
The six store closures follow a review of the retail portfolio
across the continent. Europe is an important and integral
market for Marks & Spencer as illustrated by the number of
stores. The company will still employ over 3000 staff in
Continental Europe.
Number of Stores in Europe:
No of Date of
stores entry
France 18 1975
Belgium (inc 5 1975
Luxembourg)
Netherlands 2 1991
Spain 9 1990
Germany 2 1996
Total 36
1975 First French store opened in Boulevard Haussman
First Belgian store opened in Rue Neuve, Brussels
1990 First Spanish store opens in Madrid in a joint venture
with Cortefiel SA(wholly owned since May 1999)
1991 First Dutch store opens in Amsterdam
1996First German store opens in Cologne
1998 First store in Luxembourg
In addition, Marks & Spencer operates a total of 54 franchise
stores in 12 countries across continental Europe.
Number of Franchises in Europe:
No of
Stores
Channel Islands 4
Gibraltar 1
Malta 2
Canary Islands 5
Portugal 5
Austria 4
Finland 5
Hungary 3
Czech Republic 3
Greece 11
Turkey 3
Cyprus 8
Total 54
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