Marks & Spencer Group (LON:MKS) has started talks with to sell its wholly-owned Hong Kong and Macau stores, the blue-chip company has said. The move comes as the high street retailer’s chief executive Steve Rowe continues with his restructuring of the company.
Marks & Spencer’s share price has slipped into the red in London this morning, having shed 0.60 percent to 312.60p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.36 percent higher at 7,364.13 points. The group’s shares have lost more than eight percent of their value over the past year, and are down by just under 11 percent in the year-to-date.
Marks & Spencer announced in a statemen today that it had opened talks with its long-term franchise partner Al-Futtaim, for the potential purchase and franchising of the UK group’s retail business in Hong Kong and Macau. The FTSE 100 retailer noted that the negotiations included a period of due diligence, which is expected to take several months to complete.
M&S explained that the move to sell the franchises followed the company’s strategic review of its International business in November last year when the group proposed to have a greater focus on its established franchise and joint venture partnerships and operate with fewer wholly-owned markets. The review is part of chief executive Steve Rowe’s efforts to turn around the M&S’ fortunes by restructuring the blue-chip retailer and reviving its underperforming clothing business.
Today’s update comes after Marks & Spencer revealed last month that its sales decline had continued in the first quarter of its financial year. The retailer, however, assured investors that its recovery plan remained on track.