Marks & Spencer Plans to Make India Largest International Market
Marks & Spencer Group Plc (MKS), Britain’s largest clothing retailer, plans to double store numbers in India and expand its lingerie offering there, making the Asian nation its largest international market.
“India is an extremely important market for us,” Chief Executive Officer Marc Bolland told reporters today before the opening of a store in Mumbai. The retailer plans to have 80 outlets in the country by 2016, compared with 36 now, he said.
Bolland is counting on international growth to help reverse nine straight quarters of declining same-store sales in clothing and general merchandise. Demand for high-quality lingerie is growing in India, with Technopak Advisors Pvt. estimating that the innerwear market will double to $6 billion by 2017.
At 35,000 square feet (3,252 square meters), M&S’s store in Mumbai’s upscale Bandra neighborhood is its biggest in India, where in 2008 the London-based company formed a venture with Reliance, controlled by the country’s richest man Mukesh Ambani.
The basement of the outlet is dedicated to lingerie, and will serve as a testing ground for its underwear business, Bolland said. Lingerie accounts for about a third of M&S’s clothing sales, according to Verdict Research.
The retailer may open similar sections in other Indian stores and is considering standalone outlets for women’s innerwear, according to Jan Heere, who oversees M&S’s international operations.
“There is room for tremendous growth in lingerie” in India, Heere said.
The company obtains 64 percent of the merchandise it sells in the country from local suppliers, he said. That’s up from less than 10 percent three years ago, helping reduce prices.
Sales at Indian stores increased 28 percent in the six months ended September, the company said in its earnings statement Nov. 5. Revenue at stores open at least a year showed “double-digit” growth, according to the statement.
M&S’s relationship with Reliance, India’s biggest retailer, has helped it get good deals on real estate, Bolland said. The growth in its Indian joint venture has surpassed China, where M&S owns and operates its own stores.
“We believe that the brand Marks & Spencer has a far more established brand awareness in India than it has in China,” Bolland said. “For us, the most important thing is that the priority is India.”