M&S Will Close One Third Of Its Stores In China In Case Of Difficulties

On April 8, Marks&Spencer, a British department store giant, issued a statement on its official microblog saying: Marks&Spencer will adjust its development strategy in China, focusing on the development of existing Flagship store And the central store, and look for local partners to jointly promote business growth in China.

Behind this statement is the dilemma of M&S's development in China. It is understood that M&S plans to close one third of its stores in China.

As an old department store founded in 1884, M&S Department Store With its own brand and "relationship management" mode full of British sentiment, it has become the leader of British department stores. At the beginning of its entry into China, it was also expected by the industry. In the past few years, its exclusive private brand model has not been recognized by Chinese consumers, and the "tall" British sentiment has been questioned by the industry as "acclimatized".

The root of "acclimatization" is the conservatism and caution of this old department store in the face of market changes. Analysts believe that as Martha's system is too centralized, its management is too traditional and conservative, and it refuses to further modernize, its sales performance has declined.

　　 "Inadvertent" approach

M&S did not directly respond to the report that one third of its stores in China were closed, but stressed that it would focus on developing the existing flagship stores and central stores in Shanghai. It is understood that there are 15 M&S stores in China, 7 of which are located in Shanghai, and the other 8 are scattered in Changzhou, Ningbo, Qingdao, Wuhan and other foreign cities. M&S avoided talking about the other five stores in Shanghai and emphasized the development of two of them, which also confirmed the statement of "one third of the stores closed".

In 2008, M&S opened its first flagship store on Nanjing West Road in Shanghai. Different from the overwhelming advertising of other foreign brands when they entered China, M&S's entry into China was quite low-key and did not put a lot of advertising. Low profile has always been the tradition of M&S, which relies on goodwill to spread word of mouth rather than advertising. It is understood that M&S did not launch TV advertising promotion when ITV opened in 1955. It was not until the mid-1990s that M&S produced its first fashion advertisement. In 1981, the advertising expenses of M&S ranked at the bottom of the top ten chain stores in the UK.

Unlike foreign consumers, Chinese consumers love to be lively. The low-key entry strategy made M&S not form its own brand image at the beginning. This makes M&S have been "gentle" in China in recent years, lacking enough recognition among many department stores.

"When a brand enters a new market, the entry strategy is very important." A brand marketing expert compared the entry ways of Fast Fashion H&M and M&S into the Chinese market.

"When H&M entered China that year, almost all double decker buses in Shanghai were advertised with a huge advertisement of '99 yuan for underwear'. The concept of H&M fast fashion was immediately fixed in consumers' minds. Although some fast fashions are not really 'fashion' from a professional perspective, they represent fashion in consumers' minds. " The above brand marketing expert told the reporter of China Business Daily.

"The brand image of M&S is not clear in consumers' minds, which is the main problem," Liu Hui, chief consultant of Beijing Zhaoyi Retailer Management Consulting Co., Ltd., told reporters. In fact, it is not only consumers who lack enough recognition, but also domestic counterparts in the department store industry who are relatively "unfamiliar" to Marks&Spencer. "We often go to Shanghai to investigate the department store industry, but we usually learn from enterprises like Jiuguang. Although M&S is relatively famous, we know little about it," said Chen Gang, executive general manager of Anqing Xinbai Department Store.

On the other hand, the "blunder" of entering the site is also reflected in the failure of its site selection. "M&S is not familiar with the local business and cannot get a good position, or even if it gets a good position, the rent will be much higher," a business person in Shanghai told our reporter. From the perspective of the layout of M&S in China, it seems that it extends northward and southward with Shanghai as the center, rather than first covering the first tier cities in the north, Shanghai and Guangzhou, and then gradually extending, which is quite different. In this regard, Liu Hui believes that "it is dangerous to go to the second tier cities to develop before the first tier cities have a firm foothold in the market."

　 Self support mode is blocked

In 1928, the private brand "Saint Michel" of M&S was born. The brand was initially limited to a small range of spin And then gradually replaced the products of other brands in the store. Later, 80% of the goods sold by M&S were "Saint Michel" brand, which was absolutely unavailable in other department stores.

In the retail industry, private brand often means "cheap but poor quality". But in the UK, the "Saint Michel" brand has always been a symbol of quality products. Customers do not even need to issue invoices when they buy goods at Marks&Spencer, because consumers can return them unconditionally at any time.

It can be seen that the private brand is the secret weapon for M&S to defeat its competitors and become the leader of British department stores. However, for the Chinese market, the private brand of M&S did not win the favor of consumers, but was questioned as "acclimatized".

At about 7:00 p.m. on April 23, Yangmei and her best friend came to the flagship store of M&S in Nanjing West Road. This was supposed to be the time for girls to go shopping after work, but Yangmei found that M&S had very few customers. "M&S has four floors, and the average number of people on each floor is no more than 10, and most of them are foreigners," Yang Mei told reporters.

Yang Mei, who has worked in Shanghai for many years, is 35 years old this year. According to the positioning of M&S, bayberry belongs to its mainstream customer group. But in the eyes of Yangmei, M&S clothing Being too serious and formal is not her favorite type.

"M&S clothing is a little conservative, and the color is not enough to jump. Most of them are gray and coffee, even red, is also a relatively thick color such as magenta. Although the price is similar, I prefer Pacific Department Store and Paris Spring to M&S clothes More fashionable. " Yang Mei said.

"Although private brands have the advantage of exclusive design and avoid homogeneous competition, the risk is that they are not well accepted by the public compared with trendy brands. If private brands are launched without the overall brand image, they will eventually fall into the" cold door "that no one cares about, and M&S is currently facing this situation. In addition, M&S' own brand directly followed the popular styles in the British market from the style, and did not develop the styles that Chinese consumers liked specifically for the Chinese market, so it finally got cold in the market. " The above brand marketing experts said that Marks&Spencer's private brands strictly followed the British style for more than 100 years, but ignored the shopping experience of local consumers, thus appearing "ungrounded".

Yangmei also believes that the imported food of M&S is not attractive. "A piece of bread costs tens of yuan, which is on the high side compared with the clothes costing hundreds of yuan," said Yang Mei.

In response to the query of acclimatization, M&S headquarters said: "Since M&S entered the Chinese market in 2008, we have been constantly in-depth understanding of Chinese consumers, and also have a solid customer base. Our price in China is competitive, while we also have the core competitiveness of high quality and product innovation. For Chinese customers, we also offer different sizes. "

　　 Slow market response

There is a story spread on the Internet: Nokia CEO Yoma Ollila announced at a press conference that when he agreed to Microsoft's acquisition, he finally said, "We didn't do anything wrong, but somehow we lost.". After that, dozens of Nokia executives, including him, could not help crying.

In a sense, M&S is not wrong. The high-quality and affordable clothes it provides for the middle class meet the needs of this class well, and the British sentiment and conservatism with British characteristics also conform to the temperament of the customer class culturally. But the problem is that the consumption environment has changed and the market has changed.

Since "fast fashion" has become popular in the Chinese market, traditional department store clothing brands have gradually been marginalized. This can be seen from the popularity of fast fashion brands in shopping centers. Zara, H&M, GAP and other fast fashion brands often occupy a very good position in shopping centers. "Fast fashion is a killer, which will kill many obscure intermediate businesses." Wu Ziheng, a retail expert, believes that "Martha's own positioning is a department store of the middle class. In terms of high-end westernization, it is not as light as luxury; in terms of fashion degree and parity, it is not as light as fast fashion that has risen rapidly in recent years."

Cheng Jun, the chairman of Wuhan Zhongbai Department Store, also said, "The department store business should be" trendy ", not" famous brand ". Behind it is that the post-80s and post-90s have gradually become the main consumers, which determines the current mainstream trend of consumption. Under this consumption trend, M&S, which is over 100 years old, is slightly slow to respond to fast fashion and is not sure about the market.

Data from Kantar Worldpanel, a market research organization, shows that M&S has lost some market share in the British fashion market in the past three months. M&S' market share declined by 0.2% in the 24 weeks before February 16, 2014, and by 0.4% in the 12 weeks before February 16, 2014; Women's wear fell by 0.2% in the 24 weeks before February 16, 2014, and by 0.5% in the 12 weeks before February 16, 2014.

At the same time, Next, the second largest retailer in the UK, had a pre tax profit of 695.2 million pounds in the 2013 fiscal year as of January 31, 2014, which exceeded the pre tax profit of M&S last year for the first time. Although M&S will release its 2013 annual report by the end of March this year on May 20, the industry believes that the profit of M&S will be inferior to that of its competitor Next, which is a company mainly engaged in men's and women's clothing and children's clothing shoes Fast fashion brand of hat jewelry and household products.