In India, M&S grows store network as it cuts down elsewhere; focus on small cities

Marks & Spencer India, the Indian arm of UK-based fashion and food retailer Marks & Spencer (M&S), expects to cross ₹1,000 crore in sales this fiscal (FY 2019), a decade after partnering with Reliance Industries.

M&S first entered the Indian market on its own in 2001. Other fashion brands such as Spain’s Zara and Swedish retailer H&M crossed the ₹1,000-crore sales mark in a short period after entering Asia’s third largest economy.

In an interaction with BusinessLine , James Munson, Managing Director, M&S Reliance India said that revenues have grown significantly in the last few years at a CAGR of 24 per cent on the back of the brand’s focus in markets beyond the top 10 metros as the consumers’ purchase power and disposable income has increased along with the fashion brands awareness. “More and more women are getting into the workforce (in high paying sectors) and hence the need to purchase work-wear or casual wear,” Munson said adding that a fifth of their turnover is now coming from small cities and 65 per cent of the sales come from women’s wear followed by 20 per cent from children wear.

M&S’ sales for FY 18 was ₹908 crore and it also posted profits for the first time last fiscal at ₹66.3 crore as against a loss of ₹4 crore in the previous year, according to information sourced from business intelligence platform Tofler. The company currently has about 70 stores and plans to open nine stores every six months for the next two years across formats. M&S operates large format departmental store where it sells apparels, cosmetics, footwear and lingerie. It also has standalone stores for the lingerie and cosmetics, one of its fast selling categories.

“We are focussing on investing a lot here as there is availability of good real estate in the smaller cities,” Munson said adding that India has become the largest market for the British brand outside of the UK in terms of store network. Expansion in India also comes at a time, when M&S is rationalising it store network by downing shutters in many markets, including in the UK. The plan is to shut about 100 stores by 2022.

Munson said that the offline retail market in India is growing at a rapid phase buoyed by the growth of e-commerce which has helped create consumer awareness of fashion brands.

Without directly commenting on the plans of fast fashion brands like Zara and H&M, Munson said that the company is “rethinking” its strategy and wants to create a brand that appeals to consumers across different age groups. It will appoint fashion stylists at the stores who will guide customers and launch more catalogues in the coming months in ladies wear, linen wear amongst others.

Munson, however, also clarified that the company has no plans to launch its foods business in the market, where there is a burgeoning growth in the FMCG segment.

COMMENT NOW