December 16, 2010

Why Marks & Spencer failed in Germany

Marc Bolland, CEO Marks & Spencer (photo: M&S)
Oh, là là: Clothes to crumpets retailer Marks & Spencer could reopen soon in Paris
Just over six weeks ago, rumour had it that Marks & Spencer was planning a return to continental Europe, and that the department store operator hoped to buy back some of the 38 outlets sold there in 2001.

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?

International franchisor

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.

Comments for this article are closed.

  1. Robert Clark
    Created 20 December, 2010 13:10 | Permanent link

    I was in Frankfurt the day of the announcement of their continental European pull out. The comment from the lady heading the team we were meeting at this investment bank was 'Damn, where will I be able to get my sushi now?' Her first and over-riding thought, she didn't mention the clothes, but then did mention the underwear as an important afterthought. I don't think I'd realised the extent to which UK fashion taste was looked down upon by the Germans!

    I was, though, aware of the Italian fixation, despite the British thinking of the Germans as dull dressers, while looking up to the French and Italians as more classic, designer-aware dressers. But I've tended to believe we in the UK are more fashion innovative and younger fashion-oriented -- indeed, fairly consistently since the days of Carnaby Street. Perhaps distinctive in various ways but not in a specific wider European mainstream context which is more what M&S was trying to be about. Meanwhile, elsewhere in the UK there was the development of fast, disposable fashion as prices fell from the 1990s.

    I suppose in this overall context Top Shop has set the UK mainstream tone for a couple of decades. Is it derided on the Continent? If so, I'm surprised. But then the Germans probably won't know about it -- unless their youngsters come to London shopping. Interesting. You live and learn. What about our Monsoon, Oasis, Whistles, Hobbs etc. etc. in that context -- domestic, I suppose with main international interest outside continental western Europe -- who are higher up the UK fashion market ladder? One could go on.

  2. Hermann Pöhlmann
    Created 23 December, 2010 14:01 | Permanent link

    During the Cologne-days of Marks & Spencer, I was an extreme loyal German customer of that store, and visited the outlet regularly, very often.

    Let me explain: they offered a further exceptional difference in fashion which attracted me. Between 1996 and 2001, I bought all my business shirts from the Marks & Spencer store in Cologne, and wear some of them even today. They offered really top quality, value for money, a big selection with different styles and sizes in various appealing designs and packed in a very convenient way -- without any needles, fixed perfectly with only two plastic clips -- at that time very impressive and progressive, too!

    Looking forward to seeing Marks & Spencer once again in the inner city of Cologne in the not too distant future!

  3. Created 3 January, 2011 18:57 | Permanent link

    On my travels to England, I enjoy visiting the nearest M&S branch, and always purchase something there.

    In my opinion, M&S offered some good products -- both in food and clothing -- to the German market. Also, some German products could compliment their English stores.

    The major problem for any foreign top management is trying to run German subsidiaries "from outside". It may sound silly to put it so obviously, but things are simply very different either side of the Channel.

    In my view, the expectations which foreign management have of local staff are often almost unlimited, while it all too frequently grants zero responsibility and virtually zero decision-making power to management & staff at the local subsidiary.

    I have even seen marketing brochures in German, produced and printed in England, which looked like something straight out of the UK comedy series "Fawlty Towers"; the pages were also stuck together completely out of sequence.

    From my point of view, Marks & Spencer should take a completely new approach if it decides to return, and then I am sure, that it would work. In fact, I am very much looking forward to it.

  4. Karin Krone
    Created 24 April, 2012 10:08 | Permanent link

    I think it is a pity that Marks & Spencer closed. I was working in its personnel administration division when a branch was newly opened in Essen, and I missed the company after it closed and left Germany. I very much appreciated the department store, the food department and the printed newspapers "in the German language"! I really like the English language. I should be delighted if they re-opened in the Ruhr area again.

  5. Dorothy May Morris
    Created 21 August, 2014 19:33 | Permanent link

    Food halls in German cities

    Please, please re-think opening your food halls in German cities. I know of many English people living there who miss your gorgeous ready meals. They don't seem to have ready meals in Germany. Start with the larger cities, i.e. Munich, Hamburg, for instance. Times have changed -- have a go....

  6. Ian Cowan
    Created 11 October, 2014 21:13 | Permanent link

    I relocated to Köln (Cologne) from the UK to train managers for Gap's expansion in Germany in 1998, (another foreign invader that has since departed), and Marks & Spencer was opposite on the famous shopping street called Schildergasse.

    As an ex-pat shopper, I too shopped the food hall regularly to get my sandwiches, tea bags and brown sauce. The reason I feel that M&S failed was due to the size of the store and the merchandise (or lack of it). The store was huge, absolutely massive, and the floors with the clothing on it, looked half-empty. As did many of the shelves in the food hall.

    I loved my time in Köln which was made much easier by my frequent trips to M&S. Incidentally, Gap have also entered and left the German market a number of times.

  7. Alison
    Created 7 November, 2014 22:16 | Permanent link

    M&S could convince Germany, but they need to get it right first time

    Germany has a kind of love-hate relationship with the UK, but if Marks & Spencer did enough research and got the relaunch in Germany right, they would quickly become a much loved household name here. They have to get it right first time though. First impressions count.

    German people do love many things about the UK: traditional values, traditional symbols of British life -- phone boxes, policemen, buses. British politeness, English humour.

    When it comes to clothes, price matters. I think that the prices of clothes in Germany are higher than in the UK. M&S definitely provides better quality for the price. I am not sure about the Italian reference in the article above. C&A and H&M are very popular here. Germans love tartan and knits and tweeds but also more sporty stuff. M&S just has to get the presentation right. It has to look good: well-organised and themed.

    British food has an extremely bad reputation in Germany. This may have been well-founded 20 years ago, but despite Jamie, Nigella & Co, and the food cultural revolution in the UK, we cannot lose the image. I am married to a German guy. He has eaten at excellent restaurants in the UK and even admits privately that English food is really good, but with a group of German friends, our cuisine always becomes the object of ridicule. I know that if any of my German friends had the chance to shop in M&S's food hall they would be converted.

    Price is a big issue here -- just look at how many people do their shop in Aldi or Lidl. But, there is a growing move to higher quality, and a wider range of foods. Health is a big issue. Ready meals are awful here -- I think M&S could really make this a feature.

    I am a big fan of M&S. Their online store is O.K., not as good as the UK version, which is frustrating. I would love to see them start up again in Germany -- affluent Munich as preferred choice. I would be first in line to appy for a job at their new store.

  8. Peter Merse
    Created 19 April, 2015 13:06 | Permanent link

    Please come to Germany

    Why don't we have such good shops as Marks & Spencer in Germany? Its fine food is fantastic. Many of its product ideas are created with love and thought. PLEASE come to Germany with your shops as nobody seems to have the competence to do this here!

    Sorry for my horrible English, but I enjoyed my trips to your shops in London and send you my best compliments!

  9. Cescc
    Created 23 July, 2015 12:29 | Permanent link

    Higher clothes prices in Germany

    I think that the prices of clothes in Germany are higher than in the UK. M&S definitely provides better quality for the price.

  10. Brigitte Ramm
    Created 1 November, 2015 13:35 | Permanent link

    German Consumers

    I'm German and have lived in the UK for decades. When I came here everyone was praising M&S clothing. So, I went off to see for myself. As a fashion-conscious young woman, I thought I was entering my grandmother's clothes store when I visited M&S. Whether it was the local or the London West End store, it didn't attract me a bit. What was particularly off-putting was that the garments were displayed in hundreds and in ALL sizes. Apart from that, M&S clothing lack a certain 'edge'. I was a size 12 then and thought 'good grief' what if I go out and see the same dress worn by someone size 20! We all know that certain garments would only look good in certain sizes. So, that nailed it -- for me M&S was a complete No No.

    Besides, there was Miss Selfridge, Next, John Lewis, Fenwick, Peter Jones and plenty of places in London's Oxford Street /Kings Road/Bond Street offering superb international and British fashion.

    I regularly visit my family in Germany, and I'm astounded how much cheaper my food bill is compared to the UK. Lidl and Aldi offer excellent quality for rock-bottom prices and they are doing very well in Britain too. Yes, the Germans are price conscious in almost every level of their lives. Paying your food bill at the check-out by credit card is a strict NO-NO. Supermarkets won't accept credit cards there anyway.

    In Germany ready-made meals are regarded as expensive and tasteless and only bought and consumed by lazy people. Full stop. Fast-food places like McDonalds, for instance, don't do well, and a lot of these outlets suffer loss of profit and have closed for good.

    I can't imagine that Germans would swap their fantastic home-grown fresh hot + cold food (which are found in every town and village) with ready-made meals or sandwiches à la M&S. Germans like variety and they're spoilt for choice when it comes to food. For decades you'll find thousands of international food outlets and restaurants in Germany, and Germans are always intrigued to try out a new one. If the food is to their liking, then those places have a future, otherwise not.

    Regarding retail staff training, Germany is known for its apprenticeship system even in retailing. Reputable retailers prefer recruiting staff that know the products they sell and customers appreciate that. However, the employment culture in Germany has changed a lot in the past 20-odd years or so. Many retailers in Germany nowadays have adopted the American/British system of recruiting often untrained part-time staff who are low-paid/have no employment protection (zero contracts) where they can be hired and fired at random. Perhaps that's the reason why staff finds nothing to 'smile' about whilst working for such companies.

    Back to M&S, even after so many years I don't think I would make an effort to enter any of their stores in the UK no matter how hard they've tried to 'update' their merchandise -- sorry!

  11. Susan
    Created 26 February, 2016 14:42 | Permanent link

    M&S in Cologne -- What Went Wrong?

    I am English and have lived near Cologne for nearly 27 years. I was so pleased when M&S opened up in Schildergasse, Cologne, all those years ago.

    One big mistake, apart from qualitative and expensive food in a discounter mentality, was also the fact that there was a large selection of school uniforms. If M&S had done their homework, they would have known that there are no school uniforms in Germany. There is one English private school in Cologne, however that does not warrant a whole selection of uniforms like we have in the UK. The average pupil, in a German school wears jeans, T-shirts, sweatshirts, trainers (not even proper leather shoes) ...

This is an English-language blog, please write all comments in English!
Thank you.