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Marks & Spencer may open its first store in Russia this year
One of the great symbols of modern Britain, Marks & Spencer may open its first store in Russia this year. If successful, M&S will expand rapidly all over Russia. M&S has 375 stores in the United Kingdom and another 155 stores spread across 28 countries. It pulls in more than 30 million customers monthly, returning profits of $1.3 billion in the 2004-2005 financial year. Although Russia has never had any M&S stores, English-language students learn the story of Marks and Spencer, who sold items for a penny each at the beginning of their career as market-stall owners in Leeds. M&S will have to implement similar strategies on the Russian market because competition is tough among local and foreign merchandisers. For example, retail stores Metro and Auchan now operate in Moscow and the Moscow region. Each has at least five hypermarkets, luring customers with all sorts of discounts. German firm Rewe and its Russian partners are looking to expand the Billa supermarket chain. Wal-Mart is just about the only major international trading house that has not yet invaded the Russian market. There are no fashionable M&S stores in developing markets. The company's Russian strategy is likely to resemble what it did in India, where five single-storey department stores opened in a year. Russian experts believe that M&S, currently struggling in the face of low consumer demand in Western Europe, can improve its financial standing in Russia. Corporate sales fell in January-June 2004 against 2003 figures. M&S ditched 220 stores in the U.S. and Asia, as well as 18 in France, in order to save its UK chain. Meanwhile, the Russian retail market is posting annual growth figures of 13%. M&S wants to gain a foothold on the Russian market with the help of Turkish company FIBA, its partner in Turkey. FIBA will provide most investment, spending $800,000 on the construction of the first M&S store in Russia. Companies that have established themselves on the Russian market have in the past helped other European supermarket chains. For example, Russian Trade Group is pushing the C&A and British House chains, while Stockmann runs operations for Zara. FIBA will build the first Russian M&S store at a shopping center currently being built by BIN. Formerly called the Bank of Ingushetia, this company has now changed its name to the Bank of Innovations and Investments
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