Marks & Spencer Hong Kong sales, profit slip
Marks & Spencer Hong Kong sales fell last financial year after it pared back its discounting program.
The UK department store retailer closed all 10 of its store on the mainland during the year but has retained its Hong Kong business, which is best-known for its food stores, such as the one just refurbished in Windsor in Causeway Bay.
In notes attached to its financial results, the company said sales in Ireland and Hong Kong were impacted by “a reduction in discounting”.
“Lower operating profit in Hong Kong was offset by an improved performance in the Czech Republic and India,” it said.
Moving forward, Marks & Spencer says it will develop its overseas business via partnership with local operators rather than owning its international businesses outright. In preparation for that, the retailer closed stores in 10 loss-making markets, including China.
“These markets generated total losses of £34.7 million on sales of £179.4 million in 2016/17. Our proposals are on track, with all our stores in China closed by the end of the 2016/17 financial year and consultation on store closures complete in all markets.”
Overall international profit before adjusted items rose 15.4 per cent to £64.4 million, as a result of the closures. Constant currency sales slipped by 0.1 per cent.
In Marks & Spencer’s franchise business, shipments to Asia benefitted from new store openings and expansion of the food business.
The retailer said India “performed well”, with seven new store openings during the year.
Globally, pre-tax profit fell by about 60 per cent to £176.4 million for the year to March 31. Sales were steady at £10.6 billion, with the food division improving by 4.2 per cent.