Friday, July 9, 1999 Published at 16:52 GMT 17:52 UK
Business: The Company File
M&S to close European stores
Marks and Spencer has found it hard to translate success abroad
The troubled UK retailer Marks and Spencer is to close six of its 42 stores in continental Europe.
Stores will close in Rouen and near Marseilles in France, and in Essen, Dortmund, Wuppertal and a shopping development near Frankfurt in Germany.
Guy McCracken, managing director of overseas retail for M&S, said:
The company, which has operated in Europe since 1975, still plans to open new stores in Barcelona and Frankfurt in the autumn, concentrating on large central city sites.
Marks and Spencer, once the most profitable retailer in Britain, has suffered a profit slump in the past year when profits crashed by 41% to £655m.
It now says that this year's profits may be better than expected by around £10m.
New chief executive Peter Salsbury, who took over after a bitter boardroom battle, has cut jobs throughout the UK.
M&S has also launched a new fashion collection for the autumn in an attempt to improve its dowdy image.
Foreign ventures difficult
Marks & Spencer has found it difficult, like many retailers, to translate its success to foreign shores.
Its purchase of the US men's store, Brooks Brothers, in New York proved expensive, and it did no better with a supermarket chain in New Jersey.
And it recently closed its operations in Canada at a cost of £25m.
Its overseas businesses made an operating loss before exceptional items of £14.6m compared to a profit of £66.9m in 1998.
In its annual statement, the company had said that trading in Europe had been particularly difficult because of the high pound.
"Trading was below expectations, particularly in France, Germany and Spain, where sales from core stores and recently opened footage were disappointing. The continuing strength of sterling against European currencies and the need to maintain good value in competitive markets had a significant impact on margins," the annual report concluded.
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