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Marks & Spencer’s plans for expansion in India

  • Tuesday, November 12, 2013
  • School

Retail analyst, Tarlok Teji comments on Marks & Spencer’s plans for expansion in India, with a view to making it it’s second-biggest market.

Marks & Spencer, like many UK retailers, have made a lot of mistakes with international expansion. The company currently has a joint venture in South Korea that is under-performing, as is their Chinese operations with the Shanghai store located at the wrong end of the main shopping district.

M&S has been in India for some time and initially got the price points all wrong, as well as the products themselves. Selling heavy men’s shirts with no pockets in a hot country where men do not wear jackets and need shirt pockets for their phone, wallets, and so on, means it’s not surprising that performance has been poor.

It talks of further joint venture expansion but it could go it alone under the new rules. This is not a bold step for Mr Bolland, but instead more of the same. It’s not clear what cities they plan to go into but realistically there are currently only three states that can afford M&S: Punjab, Kerala, and Gujarat.

This may serve as a distraction from putting the UK operations on the right path. The Christmas outlook is likely to be flat, and the take-up on the autumn ladieswear range has been slow in spite of the massive advertising campaign. The strategy to reposition M&S has been operation for three years and has not worked. A cynic may suggest that this is trying to create good news because at home there is underperformance. Compare the food business with Waitrose and M&S is found wanting; compare the general merchandise with Next, and again it is underperforming. It’s time for a new strategy. In spite of the recent share price performance, shareholder value has deteriorated under Mr Bolland’s tenure.