M&S looks to Europe again

MARKS & Spencer (M&S) is reportedly planning an ambitious return to continental Europe by buying back the stores it left almost ten years ago.

The retailer is believed to be holding discussions with Spanish chain El Corte Ingles about taking back some of the nine stores it sold in 2001.

M&S is also believed to be considering a move back into France by re-acquiring some of the 18 stores it sold to Galeries Lafayette, the French retailer. The decision could be unveiled on 9 November when M&S’s new chief executive Marc Bolland presents his long awaited strategic review of the chain.

The move would be a complete reversal of the retailer’s withdrawal from mainland Europe nine years ago, a decision Sir Stuart Rose, its outgoing chairman and former chief executive has said in the past he regretted.

A source told a Sunday newspaper that Bolland wanted to rebuild the store’s presence in Europe and was keen to buy back its old assets.

Another said: “M&S has been circling back to see where the ownership was on some of the properties that it exited in 2001. There is a view that the company exited them in some haste.”

M&S’s decision to leave continental Europe to focus on its core market of the UK was prompted by a two-thirds loss in its share price and dwindling profits, which plunged to £145m in the year ending 31 March 2001 compared to over £1bn in 1998.

M&S had until 2001 traded successfully in Europe. In 1997 its European operation contributed £38m in profits but by 2000 the division made a £6.1m loss and in the first half of 2001 losses widened to £10.8m.

Over the last nine years the retailer has gone through a process of modernisation and recovery a large part of which was led by Rose. The retailer’s departure from Europe is considered a wound that still needs to be healed by a number of senior M&S executives, particularly given the reaction the decision provoked. The retailer’s flagship Paris store had its own book of condolence while M&S employees staged demonstrations and sit-ins in stores, as well as a protest rally in London.

The retailer currently has no wholly owned stores in western Europe. M&S declined to comment.