August 21, 2019 / 7:17 AM / 2 months ago

Fawaz Alhokair's M&S deal in Saudi ends, still partners elsewhere

DUBAI (Reuters) - Saudi Arabia’s Fawaz Abdulaziz Alhokair 4240.SE said on Wednesday its franchise agreement in the kingdom with British retailer Marks & Spencer (MKS.L) had ended, along with similar deals with a number of “non-performing” brands.

Marks & Spencer (M&S) said in an email that its franchised stores in Saudi Arabia were transferred to Al-Futtaim Group in 2018. M&S has 15 franchised stores in Saudi Arabia.

“We are focused on continuing to work with Al-Futtaim Group to develop and grow our business in Saudi Arabia,” M&S told Reuters.

M&S still has a partnership with Alhokair in Armenia, Georgia and Kazakhstan, according to M&S’s website.

M&S has more than 400 stores outside the United Kingdom, where it is a mainstay of shopping streets with more than 1,000 outlets. Its international business has been struggling, however, with revenues falling 14% and underlying operating profit down 6% in the year ended March 30, 2019.

Alhokair also said on Wednesday it made a first-quarter net profit of 224 million riyals ($60 million), down 10.1% from the same period a year earlier.

The firm, which owns franchise rights for brands including Mango, Zara and Banana Republic in the Middle East, said a decline in sales during the quarter was driven by the closure of non-performing stores and the disposal of weak brands as the group presses ahead with a “portfolio optimization strategy.”

Reporting by Tuqa Khalid and Saeed Azhar; Editing by Mark Potter

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