Burt et al M&S Failure irrdcr 2002 - Int Rev of Retail Distribution and Consumer Research 12:2 April 2002 191219 Retail and retail failure issues

Burt et al M&S Failure irrdcr 2002 - Int Rev of Retail...

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Retail internationalization and retail failure: issues from the case of Marks and Spencer S.L. Burt, K. Mellahi, T.P. Jackson and L. Sparks Abstract Retail internationalization has attracted much attention in recent years as the scale and nature of the activity has changed. Most analysis of retail internationalization however is based on market entry and mainly successful businesses. Here, the internationaliza- tion strategy of Marks and Spencer over 30 years is examined. Its recent large-scale withdrawal from such activity is considered in the light of theories about inter- nationalization and business failure. The complexity of market exit in retailing is emphasized. It is suggested that market exit and failure are important under- researched dimensions of retail internationalization. More detailed and careful work on market entry and withdrawal (failure?) is needed to adequately conceptualize the subject area. Keywords Failure, internationalization, market entry, Marks and Spencer, retail, with- drawal International expansion has been the graveyard of many prominent UK retailers, and none more so than Marks and Spencer. Now it must extricate itself from the businesses around the world that have never ful lled its hopes. (Urry, M. ‘Overseas expansion has been retailer’s graveyard’, 30 March 2001, ft.com) Introduction On 29 March 2001, Marks and Spencer (M&S) announced that it was to sell its Brooks Brothers clothing chain (USA and Japan) and Kings supermarkets (USA) businesses, and turn its company-owned stores in Hong Kong into a franchise. In addition, it was going to close most of its company-owned S.L. Burt, L. Sparks, Institute for Retail Studies, University of Stirling, Stirling, FK9 4LA, UK; e-mail: [email protected] K. Mellahi, Loughborough University, Loughborough, UK. T.P. Jackson, Coventry University, Coventry, UK. The International Review of Retail, Distribution and Consumer Research ISSN 0959-3969 print/ISSN 1466-4402 online © 2002 Taylor & Francis Ltd DOI: 10.1080/09593960210127727 Int. Rev. of Retail, Distribution and Consumer Research 12:2 April 2002 191–219
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continental European stores, viewing them as ‘distractions’ in its quest to restore its fortunes (which have seen sales stagnate since 1998, pro ts (after exceptional items) fall by over £1bn in three years and its share price collapse from a high of £6.60 on 3 October 1997 to a low of £1.70 on 20 October 2000). A wave of protests across continental Europe about the closures and job losses was the result. This ‘managerial giant of the western world’ (Drucker 1974) and ‘one of the best managed companies in the world’ (Tse 1985) found its closure announcement condemned by the French Prime Minister, Lionel Jospin, as ‘particularly unacceptable . . . (they) should be punished’. Other French minis- ters weighed in with comments on the ‘scandal’ and ‘exceptionally brutal behaviour’ of the company. In early April 2001 a French court ned M&S for breaking the law through a lack of consultation with its workers (they claimed
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