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M&S offloads Hong Kong business

Marks & Spencer has franchised its Hong Kong and Macau business to existing Middle East partner Al-Futtaim.

Under the deal, which took place on 30 December, Al-Futtaim has purchased 27 M&S stores in Hong Kong and Macau, becoming the retailer’s sole franchisee in the two regions.

Al-Futtaim now operate 72 stores for M&S across 11 markets in Asia and the Middle East. It has worked with M&S since the opening of its Dubai store in 1998.

The move comes as part of a strategic redevelopment for M&S, which has seen the business significantly alter its approach to international operations. In 2016, M&S said it would increase its focus on franchise and joint venture operations, operating with fewer wholly owned markets.

Paul Friston, international director for M&S, said the company has “substantially reshaped” its international business, adding that the move has improved profitability and positioned the business for growth.

The announcement follows a series of changes at the retailer last year, which saw former Halfords CEO Jill MacDonald join the business in the newly created role of managing director for clothing, home and beauty, and director for clothing and beauty, Jo Jenkins, announce her departure.

Like-for-like sales in clothing and home slipped 0.7% for the 26 weeks to 30 September 2017, compared with the same period in 2016. Group revenue was up 2.6% to £5.1bn while profit before tax and adjusted items fell 5.3% to £219.1m.

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