M&S begins talks to franchise stores in Hong Kong and Macau

London - Marks & Spencer may be pulling out of certain loss-making international markets, but that has not stopped the British department store from strengthening its relationship with its established franchise partners. M&S revealed on Wednesday morning that it has begun talks with its long-running franchise partner Al-Futtaim for the potential purchase and franchising its owned retail business in Hong Kong and Macau.

The discussion period, which includes commencing a period of due diligence, is expected to take several months. M&S will keep its employees up to date on any key developments during the process and M&S stores in Hong Kong and Macau are set to trade as normal. If the talks prove to be successful then Al-Futtaim would become the sole franchisee for M&S in Hong Kong and Macau.

“As long-term partners of Marks & Spencer, I’m delighted that we are now working together to explore the potential expansion of our partnership to Hong Kong and Macau,” said Stephen Rayfield, Senior Managing Director, Fashion & Lifestyle Division at Al-Futtaim. “M&S and Al-Futtaim share values, and an approach that focuses the customer at the heart of our businesses.”

M&S seeks to franchise retail business in Hong Kong and Macau

“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.” Marks & Spencer first began trading in Hong Kong in 1988. Since then the British department store group has gained a strong reputation and brand awareness, currently operating 27 stores in Hong Kong and Macau. The move follows on from Marks & Spencer strategic review of its international business in November 2016. At the time M&S revealed it would be pulling out of 10 loss-making markets while focusing on strengthening its established franchise and joint venture partnership in order to continue running with less wholly-owned markets.

“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," said Paul Friston, Marks & Spencer’s International Director. "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.”

Al-Futtaim has been a key franchise partner of M&S since 1998 when it opened the first Marks & Spencer store in Dubai. Today, Al-Futtaim operates 43 M&S stores across seven markets in the Middle East, as well as Singapore and Malaysia.

Photos: Courtesy of M&S International