Marks & Spencer has opened talks with one of its franchise partners, Al-Futtaim, for the potential purchase and franchising of M&S‘s owned retail business in Hong Kong and Macau.
The deal would mean Al-Futtaim would become the new sole franchisee for M&S in Hong Kong and Macau.
The talks follow M&S‘s strategic review of its international business in November 2016, where the department store chain proposed to have more focus on its established franchise and joint venture partnerships and operate with fewer wholly-owned markets.
The retailer says that in Hong Kong, where it has traded since 1988, the business is profitable, has strong brand awareness, an established store estate of 27 stores and a loyal customer base.
The talks between M&S and Al-Futtaim includes commencing a period of due diligence, which is expected to take several months to complete.
M&S said its employees would be kept informed of any developments throughout the process and M&S stores in Hong Kong and Macau will continue to trade as normal.
Al-Futtaim has worked in partnership with M&S since 1998 when it opened the first M&S store in Dubai.
Today, Al-Futtaim operates 43 M&S stores across seven markets in the Middle East, as well as 16 in Singapore and Malaysia.
“In November we set out our plans to create a more sustainable, profitable and customer-centric international business for M&S by focusing on our established partnerships,” M&S international director Paul Friston said.
“Al-Futtaim is a key partner to M&S in Asia and the Middle East and we are both committed to putting the customer at the heart of everything we do.
“With significant scale and retail expertise in the region, we are looking forward to discussing the potential extension of our partnership to Hong Kong and Macau as we continue to grow and develop our business together.”
The potential purchase relates to M&S‘s owned retail business in Hong Kong and Macau only.
M&S‘s Hong Kong sourcing based operation will remain wholly-owned.
Internationally, Marks & Spencer trades in 50 markets, with over 400 stores and an online presence in 25 markets.