Marks & Spencer (M&S) has closed for business in Portugal and will decide in the New Year whether to pull out of the country altogether.
M&S had five stores in Portugal with local franchise partner CRB. The retailer terminated its franchise agreement and is now deciding whether to pull out, reopen the stores under direct ownership or look for a new franchise partner.
An M&S spokesman said CRB had “overextended itself”. “We terminated the agreement with CRB because they didn’t honour payments to M&S or maintain the required standards of stock and display. For the last two years we’ve extended credit and helped CRB restructure their business,” he added.
The five stores provided roughly 4,645m2 and were located in Lisbon. CRB held leases on all the stores, which will be much sought after commodity given the chronic shortage of retail space in Lisbon.
The news comes as M&S is surrounded by intense takeover speculation. Corporate raider Philip Green confirmed he was interested in bidding for Britain’s best-loved retailer.
Takeover rumours took root after M&S unveiled a 45% slump in interim pre-tax profits to £192m at the start of November. The retailer suffered a 7.9% fall in like-for-like sales in the UK while its overseas stores registered a loss of £20.1m.
