UK retailer Marks & Spencer withdraws from mainland China market

Marks & Spencer Group will withdraw from the Chinese mainland, announcing it would close all of its 10 stores in the country amid continuing China losses by the UK-based retailer.

“Our review has shown that our stores in mainland China continue to make losses and as a result we can no longer trade with a store presence in the Chinese market,” said Adam Colton, managing director of Greater China for Marks & Spencer.

“Unclear branding positioning” is mainly to blame for the store closures, said Hanna Li Wai-han, a strategist at UOB Kay Hian (Hong Kong).

“M&S seems not attractive or competitive no matter whether its regarding its brand, quality or price. It is not surprising for me to see store closures or business restructuring,” Li said. “ The development of e-commerce in mainland China also puts pressure on M&S’s Chinese business operations as online shopping provides diversified channels for Chinese customers to global brands.”

Jack Chuang, OC&C Strategy Consultants’ Greater China partner echoed the view, saying “lack of localisation” could be one of the “root causes” for the retailers poor performance in overseas markets.

Taking China as an example, “M&S made a couple of mistakes around not adapting to the market, not only in assortment, but also store format, or even the overall proposition and target consumers,” Chuang said.