Business Intelligence on Retailing, Franchising, and Consumerism in China

Marks And Spencer Admits Mistakes In China

Sir Stuart Rose, executive chairman of the British retailer Marks and Spencer, said that the company did make some basic shopkeeping mistakes when opening its first outlet on Chinese mainland, but it will still develop more stores in China, doubling the share of overseas sales in the group's total revenue.

Sir Stuart made these comments when being interviewed by the Financial Times during his first visit to the Marks and Spencer Shanghai flagship store. Because of supply chain problems and shortages of smaller-sized clothes required by Chinese consumers, the sales of this store have been lower than expected.

Sir Stuart said that although Marks and Spencer was affected by the global financial crisis and sales problems in Britain, the company still planned to increase the contribution of its overseas business to the group's total revenue from the current level of less than 10% to between 15% and 20%. He said Marks and Spencer would opened more stores in China. However, they would not rush to conquer the Chinese market until they conquer the basics of shopkeeping in China.

At the same time, Sir Stuart admitted that the company misunderstood the Chinese mainland market, assuming that its experience in Hong Kong could be directly transferred to this market. Therefore, the clothing sizes supplied in Shanghai were based on the Hong Kong sizing, but the smaller sizes rapidly sold out. "We had a screw-up," he said.

Sir Stuart added that Marks and Spencer would wait patiently for the Shanghai branch to make profits and he predicted it would need three years.

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