Marks & Spencer (M&S) today announced it has opened talks with its long-established franchise partner Al-Futtaim, for the potential purchase and franchising of M&S's owned retail business in Hong Kong and Macau. A successful conclusion to these discussions would see Al-Futtaim become the new sole franchisee for M&S in Hong Kong and Macau.
Al-Futtaim has worked in partnership with M&S since 1998 when it opened the first M&S store in Dubai. Today, Al-Futtaim operates 43 Marks & Spencer stores across seven markets in the Middle East, as well as in Singapore and Malaysia. Most recently Al-Futtaim has extended the reach of M&S's popular chilled food to three markets, and will shortly be opening the first standalone M&S Food store in the Middle East.
The talks follow M&S's strategic review of its International business in November 2016, where M&S proposed to have a greater focus on its established franchise and joint venture partnerships and operate with fewer wholly-owned markets. In Hong Kong, where M&S has traded since 1988, the business is profitable, has strong brand awareness, an established store estate of 27 stores and a loyal customer base.
M&S and Al-Futtaim have now entered into discussions on the potential purchase and franchise which includes commencing a period of due diligence, which is expected to take several months to complete. M&S employees will be kept informed of any developments throughout the process and M&S stores in Hong Kong and Macau will continue to trade as normal.
Paul Friston, Marks & Spencer's International Director, said:
"In November we set out our plans to create a more sustainable, profitable and customer-centric International business for M&S by focussing on our established partnerships. 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. 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."
Stephen Rayfield, Senior Managing Director – Fashion & Lifestyle Division at Al-Futtaim said:
"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.
"M&S and Al-Futtaim share values, and an approach that focuses the customer at the heart of our businesses. 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."