M&S plans to significantly reduce prices in its overseas locations in an effort to enhance its international market presence.
CEO Stuart Machin stated he aims to “restore the competitiveness” of the retailer’s stores outside the UK after discovering their pricing was “way out of kilter on price.”
He pointed out that one of M&S’s outlets in Singapore was approximately a third more expensive compared to its competitors.
Machin elaborated that the elevated prices internationally were due to both M&S and its franchise partners making a profit on the sales.
During an investor day session earlier this month, he remarked: “The truth is, there is no win-win partnership with our franchise partners…We need to re-contract with those partners and reset the expectations.”
He indicated that the franchise agreements place a greater share of the risk on partners, resulting in them consistently acquiring only the basic ranges each year, opting for products they know will sell because they “don’t want to take a risk, so they buy safe.”
Machin continued: “That is why when you visit many of our international outlets, you will notice the same everyday range, year in, year out…We must completely rethink our international strategy.”
Potential adjustments under consideration include experimenting with new products abroad and improving the speed at which the retailer dispatches stock to these markets.
The retailer operates 434 international outlets, with 264 of those managed by franchise partners across Asia, the Middle East, and Europe.
M&S appointed Mark Lemming, who previously served as clothing and home supply chain and logistics director, to the position of managing director of international earlier this year.
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