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During 2009/10 sales in our International business grew by 5.7%, accounting for 10.2% of total Group revenues.

This year we have focused on developing our partnership in India and growing our Central and Eastern European business. Over the last 12 months we have invested in our operational capabilities, resulting in a better product offer, tailored to meet the needs of specific markets, as well as building a platform for future growth.

M&S International sales*
£949.4m +5.7%
M&S International as a share of Group revenue
10.2% +0.3% pts

*52 weeks

Growing our international business

In 2007/08 we set a target to grow our International business to between 15 to 20% of total Group Revenue within five years and over the last 12 months we have focused on four key elements to help us achieve this namely:

  • growing our Central and Eastern European partnerships;
  • building sustainable businesses in India and China;
  • accelerating growth with our franchise partners; and
  • continuing to explore new opportunities.

This year we have continued to expand our global footprint. We now have 327 stores in 41 territories (includes Republic of Ireland), with the average square footage of our international stores increasing from 10,773 to 11,129.

Our International business model is made up of partly and wholly-owned subsidiaries and franchises. This broad spread of ownership models and countries has enabled us to perform well throughout a difficult global economic environment even when individual markets have been impacted.

Improving efficiency

Operational efficiency is key to building a platform for growth. The introduction of our International Range Planner last year has improved our ability to tailor the product offer for individual markets. It enables us to plan for regional variations and accurately stock the right colours and sizes to meet the specific needs of our international customers, responding to seasonal requirements in Russia or greater colour variations in India for example.

Improvements in our supply chain have enabled us to move products through our network faster and more efficiently. We now move over 21% of our stock through our four international hubs in Hong Kong, Singapore, Sri Lanka and Istanbul direct to their destination, as opposed to shipping international stock via the UK.

Partly owned

Indian subcontinent

Expanding our Indian operation with our partner Reliance Retail has enabled us to transform our position in the market. Under our previous franchise relationship we were a small premium retailer selling UK products at higher prices from small stores. Through our partnership with Reliance Retail we have been able to open larger stores and realign our prices by locally sourcing up to 38% of our products, with an aim to reach over 60% by 2012. Local sourcing provides us with the flexibility to respond to market needs, for example in India pockets on shirts are common, as jackets are rarely worn in the heat, so we add these to locally sourced shirts.

We have opened four new stores in India this year, giving us a total of 16 stores. We now have a strong platform in place from which to significantly expand our presence in this market.

India presents us with a huge opportunity – with a population of 1.2 billion and economic (GDP) growth at 7.2%. With the right product and the right partner we are well placed to take advantage of this.

Eastern Europe

In 2008 we bought controlling stakes in our Czech and Greek businesses and since then we have strengthened the management teams on the ground to create the right mixture of local and M&S knowledge.

Over the last 12 months our business with our Czech partner has grown, opening 10 new stores across the Czech group in Poland, Slovakia and Estonia, taking the total number to 36. Over the next year, we will continue to develop our presence in these regions, focusing on key cities in the Czech Republic, Poland and The Baltics.

Greece has been hit hard by the economic downturn. But we continue to work closely with our partner Marinopoulos Group to keep stocks tight and manage the business, to give us more flexibility in this environment.

Wholly owned

The Far East

In 2008/09 we opened our first store in Shanghai. Since its opening, we have developed our knowledge of local trading and put in place an infrastructure to support sustainable growth in this market, including a new warehouse and a strong head office team. In the short-term, we will focus on developing our presence in Shanghai and plan to open a second store in the city in summer 2010, with an aim of opening a third by the end of the 2010/11.

The potential in China is similar to that of India, with a large population and economic (GDP) growth at 8.7%. This year we have focused on adapting our product to suit the needs of the local market. For example, we have introduced size 6 and size 4 across womenswear to cater for smaller size requirements and are developing ‘Asian fit’ bras for the market. We will continue to improve our product tailoring, through increased local sourcing.

Our Hong Kong stores have delivered a strong performance, despite the economic pressures in the region. Following the successful Food to Go trial, in May 2010 we opened our first standalone food store in Hong Kong. The new store offers a comprehensive range of chilled products, a first for M&S in the international market. We now have 11 stores in the region and plan to open a further store later in 2010.

Republic of Ireland

The economic environment in Republic of Ireland continued to be challenging. However, our pricing remains competitive and we responded to the changes in alcohol duty and VAT, offering an immediate reduction to our customers ahead of our competitors.


Our franchise operations now account for around 31% of total International sales.

With Fiba, our franchise partner in Turkey, the Ukraine and Russia, we have had a very good year and have opened eight new stores.

Al-Futtaim, our partner in the Gulf, has had a tougher year. Our stores there performed strongly until the autumn, when the Dubai economy faltered. However, we remain confident about this market – there is an affluent customer base and we have a strong property portfolio, including a number of larger stores, enabling us to showcase more of the product range.

We have a long established franchise business in The Channel Islands, with the rest of our franchise business located in a variety of locations, including Tenerife, Marbella, Gibraltar, Bermuda, Cyprus and Hungary.

Looking ahead

We want to build a platform for long-term growth and to do this we know we must continue our international expansion at a sensible pace. Emerging markets represent a great opportunity for M&S and we will focus on creating sustainable businesses in these countries. We will ensure our products are right, editing ranges to suit our markets and responding to the unique price architecture of each country, locally sourcing wherever possible. We will continue to grow our property footprint, increasing the average square footage of our stores. All of this will be underpinned by an efficient operating model.


Product Tailoring In India we sell polo shirts in three times the number of colour variations as we do in the UK, to cater for the local market’s taste for bright colours.


International mystery shopping This year we rolled out our successful mystery shopping programme to our international stores. We produced a tailored service manual and have seen continued improvement across the year, with scores now at 80% and we will be keeping up this momentum with regular visits.


Fresh Food Trading from 1,400 sq ft, the new standalone food store in Wan Chai, Hong Kong offers over 800 food and drink products. 300 of these are fresh chilled foods, including a choice of traditional British and international ready meals such as Italian and Indian. The store also boasts an in-store bakery that freshly bakes pastries and bread each day.


Isha Tambe is store manager of our Mumbai store – our first store in India with partners Reliance Retail, which opened in April 2009.