Why Marks & Spencer failed in Germany
Oh, là là: Clothes to crumpets retailer Marks & Spencer could reopen soon in Paris
According to "The Sunday Telegraph", the London-based multiple has approached a number of European retailers, including El Corte Inglés and Galeries Lafayette, regarding properties.
However, new chief executive Marc Bolland failed to announce any such plans when he unveiled his three-year plan for the group in November.
Instead, Bolland referred to the doubling of international sales to between €943m and €1.2bn by 2013-2014 – mainly by expanding the company's franchise model.
Despite this cold water on the flames of speculative journalism, the idea of a return is more than plausible. Could M&S also make a comeback in Germany, and why did it fail here last time?
With around 320 (mostly franchised) stores overseas, Marks & Spencer remains an international player and plans to expand further in India and China. Bolland is Dutch and will not share the old Anglo-Saxon diffidence regarding all things "continental". Also, Sir Stuart Rose, the outgoing Chairman and former CEO, has never hidden his regret about the decision to exit mainland Europe.
The retreat from France, Spain and Germany etc. was motivated less by losses within the European division of €7.2m in 2000 and €12.7m in H1/2001 than by numerous problems on the company's home market.
Last but not least, international statistics reveal that retailers nearly always have another go in countries where they have failed.
Memories of M&S Germany
The media talk this November about a possible return of Marks & Spencer to Europe with its own stores does, however, evoke curious memories of its time in Germany. The decision to open a first German store in Cologne in October 1996 was taken at a high point in the long history of the company on its home market where it is an institution.
At the time, the Brits were in advance of most German retailers in terms of sandwiches and chilled ready meals marketed under the tremendously successful private label "St Michael". The quality of these ready meals aimed to rival gastronomy and they covered an exciting range of ethnic food recipes.
However, the Marks & Spencer fashion offer, lacked "freshness", and, with the exception of ladies underwear, seriously underwhelmed the German consumer.
In fairness to the company, one can understand their puzzlement. After all, when it comes to food, Germans are the most rational on the planet and will accept lack of service, long queues and a Spartan store ambience in return for quality at low prices. Why, therefore, shouldn't the Germans have accepted a fashion proposition with an excellent value equation that appeals to the brain rather than the heart?
No sex, please, we're British
Unfortunately for "Marks & Sparks", as they are fondly known by the British consumer, the German psyche doesn't work rationally when it comes to clothes. Local consumers tend to save whatever they can by renting rather than buying property and by buying food at a hard discounter in order to purchase a big car, travel abroad, eat out and to dress attractively. By attractively, they essentially mean Italian, but at all events not British.
Although post-war Germans are far more Francophile than Anglophile, there are many who appreciate English humour and politeness. However, there is one thing Germans do not see the British as – and that is sexy. In fact, the British are regarded as an almost asexual race. Sex and fashion for the Germans is Italian or French – full stop.
Whatever Marks & Spencer may have wished to the contrary, it is not the average German's deepest desire to look English. In fact, most Germans would not be seen dead in British clothes. It was painfully noticeable when visiting the stores that there were often many customers exploring the merchandise with a puzzled look, but few ever seemed to buy anything at the tills.
An attempt to purchase a blue blazer, thinking that M&S couldn't do too much wrong with such a classic English product, points to a reason. Doubtless much to the astonishment of the locals, each blazer claimed to embrace no less than three separate German sizes, and the finish felt concrete.
Logistics and sites
Given this idiosyncratic approach to fashion, it was therefore a great pity that, for logistics reasons, M&S could not deliver anything like their full chilled food range from England where they were truly innovative and had a USP vis-à-vis their German competitors.
Be this as this may, Marks & Spencer could perhaps have succeeded long-term if it had stuck to Cologne, Frankfurt and a handful of the larger cities where there are substantial numbers of ex-pats and the locals are relatively cosmopolitan. When in autumn 1998, however, the company announced the opening of three new outlets in Essen, Dortmund and Wuppertal, it sounded its own death knell.
London charm school
During their five years in Germany, ex-pats were probably their greatest fans. They were not always rewarded for their loyalty. Members of staff were generally as sullen and surly as anywhere else in German retailing. Admittedly, M&S management was quick to recognise this and attempted a remedy. Like British Rail, they set up a type of "charm school" to perfect staff training. However, the trainers in London had to admit that their hardest task was "getting the Germans to smile".
Any idea of a charm school is facinating, but staff never smiled. One day, LZ-editor Annette C. Müller was indeed treated to a wonderful smile by a girl at the check-out in the food department basement of the Cologne store on Schildergasse high street.
"Ah," she said, "You must be one of those German staff who were at the company charm school in London?" A look of astonishment came over the till-lady's face: "No, Madam, I'm Turkish, and it's my first day here."
Related articles in German: Interviews by Mike Dawson in Lebensmittel Zeitung with Keith Oates, Deputy CEO of Marks & Spencer Plc; Derek Hayes & Guy McCracken, Executive Directors M&S Plc; and Marc Bauwens, General Manager Marks & Spencer Germany.