Marks & Spencer is in talks with franchise partner Al-Futtaim over offloading its entire Hong Kong and Macau businesses.
The two long-time partners have entered a period of due diligence, which is expected to take several months to complete. M&S employees will be kept informed of any developments throughout the process and M&S stores in Hong Kong and Macau will continue to trade as normal.
The beleaguered retailer has been looking to exit a number of its international territories, where it has struggled to get a foothold, since carrying out a strategic review of the division last November. It has already come out of China, where it failed to build a presence amid struggles with sizing and marketing.
In its most recent annual results, the business posted a 15.4 per cent rise in international profit before adjusted items, to £64.4m, as a result of quitting stores in 10 loss-making markets. Revenues were up 10.7 per cent to £1.18bn.
In Hong Kong, where M&S has traded since 1988, the business is profitable, has strong brand awareness, an established store estate of 27 stores.
Al-Futtaim has worked with the British retailer since it opened its first Dubai store in 1998. It operates 43 stores for M&S across the Middle East, Singapore and Malaysia. Al-Futtaim will shortly be opening the first standalone M&S Food store in the Middle East.
M&S international director Paul Friston said: “Al-Futtaim is a key partner to M&S in Asia and the Middle East and we are both committed to putting the customer at the heart of everything we do. With significant scale and retail expertise in the region, we are looking forward to discussing the potential extension of our partnership to Hong Kong and Macau as we continue to grow and develop our business together.”
Stephen Rayfield, senior managing director for Al-Futtaim's fashion and lifestyle division, added: “Al-Futtaim looks forward to building on our solid foundations as we continue to enrich our customers' lives and aspirations through the provision of quality products and services in Hong Kong and Macau - these are among Marks & Spencer’s most successful and important international markets.”