London: British retailer Marks and Spencer announced plans of opening its first store in China after posting a 43% hike in net profits during its first half.
Profit after tax grew to $820 million in the six months to September 29 compared with the first half of 2006, as shoppers flocked to its newly-refurbished British stores that sell food and clothes.
Group revenue climbed 6.5% to 4.18 billion pounds. “We have decided to enter China on a wholly-owned basis, leveraging off the operational presence we already have in Hong Kong and Taiwan,” M&S said in its statement.
“We will take a long-term view of this market and expect to grow on a site by site basis in order to manage our exposure and risk. We expect our first store to open during the course of the next financial year,” it added.
The retailer added that it was looking to expand its operations in India, which it described as “an equally exciting long term opportunity.”
Meanwhile following its latest strong results, M&S said it would hike its interim dividend by almost a third and carry out a share buyback worth 1.0 billion pounds.
“Whilst the short term economic outlook remains uncertain, the actions we have taken to reposition and revitalize M&S over the last three years put us in a good position to continue to outperform and give us confidence in the long term growth prospects of the business,” chief executive Stuart Rose said in the earnings release.
Marks and Spencer, a leading high-street name in Britain, endured falling profits and drastic cutbacks earlier this decade because its long-standing formula of providing reliable middle-of-the-road fashion at mid-range prices had become disconnected from its customer base.
That led three years ago to a takeover bid worth 9.1 billion pounds from British tycoon Philip Green, who promised to shake up the group. But Marks fended off the approach worth 400 pence a share and put Rose in the hot seat.
On Tuesday Rose said that by Christmas, Marks will have modernized 70% of its British stores since he became chief executive.
The group, which trades from more than 500 stores in Britain and 257 overseas, meanwhile said that underlying pretax profit grew by 11.5% to 451.8 million pounds in the first half.
In morning trade on London’s FTSE 100, the share price of M&S stood at 635 pence, a gain of 0.47%.