Marks & Spencer looks to India to stem fall in clothing sales

MUMBAI, India - British retailer Marks & Spencer is looking overseas to try to stem a steady decline in clothing sales, focusing on India to replicate a move towards more stylish fashions that has failed to convince consumers at home.

Britain's biggest clothing retailer said on Monday it planned to make India its biggest foreign market, increasing its store count there to 80 by 2016 from 36 currently.

"Three years ago our strategy changed and we identified India as a priority market and with our joint venture partner here we are confident of achieving this target," Chief Executive Marc Bolland told reporters at the launch of a new flagship store in Mumbai.

Bollard, who joined the firm in 2010 and has built a recovery plan around higher quality and more stylish fashions, has come under increasing pressure from investors as the group's clothing sales have fallen.

They dropped for the ninth quarter running in the three months to September, while profits in the first half of its financial year shrank 9 percent.

To succeed in India's apparel market - worth an estimated $38 billion (24 billion pounds) a year - M&S has to take on the world's biggest fashion retailer Inditex and its Zara brand.

According to its latest regulatory filings, M&S has failed to turn a profit in India since 2009. In the year to March 2012, Marks & Spencer Reliance Retail Ltd reported a net loss of 25.95 million rupees (258,886 pounds).

Over the same period Inditex Trent Retail India Ltd - which entered the Indian market as the retailer for Zara almost a decade after M&S launched its first stores there in 2000 - reported profit of 383 million rupees over the same period.

"Since they entered, Marks & Spencer has had one issue and that is getting their positioning right," said Harminder Sahani, managing director of retail consultancy Wazir Advisors.

"They are now trying to become hot and happening and that is a very competitive segment."

"The management acknowledges that a lot of time has gone by trying to get India right," said an M&S consultant who declined to be named as he is not authorised to speak to the media.

"But there is great hope in the M&S headquarters that India will work with all the changes they are making."

M&S said sales rose 28 percent in India last year, declining to give figures.

M&S initially joined with Indian franchise partner Planet Retail, marketing itself as an exclusive, expensive brand.

When that strategy failed, it tried to sell itself as an affordable, quality brand via the joint venture it still operates with Reliance Retail, a unit of billionaire Mukesh Ambani's Reliance Industries.

M&S has expanded the size of its shops in India and brought in more clothing ranges.

Retail consultant Sahani said M&S would benefit from emphasising its value-for-money image rather than its fashion credentials.