Marks & Spencer Champs-Elysées reports 9.8 million euro loss
Amidst problems with profit erosion, Marks & Spencer has to affront the major loss made by its flagship Champ-Elysées store in Paris. Opened in October 2011, the store is said to have generated 9.8 million euros in losses over the first four months of its financial year. The loss is enough to make shareholders question the company’s reorganizational strategy.
Documents provided to shareholders indicate a loss of 10 million euros for Marks & Spencer in France. The company’s second store in France only opened in October 2012 so fingers point to the flagship Champs-Elysées store. Being the smaller of the two stores (but still measuring 1,400 square metres) and situated on one of the most expensive streets in the world, the store was set to be a symbol of the company’s big return to France after having left 10 years.
Following the loss, British observers are beginning to question Marks & Spencer’s new strategy, which relies heavily on its international network as a catalyst for growth. International development for the company will occur via franchises, unlike the activity in France, Ireland, Hong Kong and Shanghai, which belong to the company.
Information on the company’s French activity comes shortly after Marks & Spencer published a 3.8% decline in sales for its third-quarter after a disappointing Christmas period. It looks as though the company is going through some troubled waters after reporting a 4% drop in operational profit for the first half of the year.
Marks & Spencer has 703 stores in the United Kingdom as well as 400 international locations. After the first two openings in France, the company is looking to open three stores in the Paris area for autumn 2013.
By Matthieu Guinebault
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