M&S committed to Ireland despite partial France exit due to post-Brexit EU trading rules

The retailer has been hit by supply chain issues due to the huge amount of extra paperwork required.

M&S said its issues relate only to its French stores.

Marks & Spencer has said it remains committed to its operations in Ireland, despite saying that post-Brexit EU trade rules are forcing it into a partial exit from France.

M&S said it would close all 11 French franchise food stores it runs with its partner SFH because trade rules in place since Britain left the EU had hammered product availability.

The department store giant said that its remaining nine French franchise stores, run with Lagardere Travel Retail, will continue to trade and the pair were working on a sustainable future business model.

M&S chairman Archie Norman has complained for months that M&S was struggling to get goods into Ireland and France since Britain left the EU single market at the beginning of the year, due to the huge amount of extra paperwork.

An M&S spokesperson said the closure issues only relate to its operations in France.

"M&S has a long history of serving customers in France, and this is not a decision we or our partner SFH have taken lightly," said M&S' international director Paul Friston.

As things stand today, the supply chain complexities in place following the UK’s exit from the European Union now make it near impossible for us to serve fresh and chilled products to customers to the high standards they expect, resulting in an ongoing impact to the performance of our business." 

The 11 stores that will close by the end of this year are located predominantly across the high streets of Paris, while the nine that are run by Lagardere are located in travel hubs such as airports, as well as railway and metro stations.

A spokesperson for British prime minister Boris Johnson defended the Brexit process.

"We believe that the approach we have taken is the correct one," the spokesperson said. "It is something that the public voted for and it is already bringing benefits to the public."

The spokesperson added that the UK government had also provided significant funding, advice, and support throughout the Brexit period so companies could prepare and understand the changes.

In April, M&S reconfigured its food business in the Czech Republic to remove supply chain risks. 

It took all fresh and chilled products from its stores and doubled ranges of frozen and ambient products.

Last month, M&S upgraded its profit outlook after a jump in demand for food in its home market and a surge in online clothes sales indicated that its latest turnaround plan was starting to deliver.

M&S’ share price was down nearly 3% after the news, with that movement paring the stock’s gains during 2021 to around 33%.

The retailer said last weekend that it was reviewing the future of its French business, with the new trade rules continuing to impact product availability in stores.

“In light of the new customs arrangements, we are taking decisive steps to reconfigure our European operations, and have already made changes to food export into Czech Republic," M&S said on Sunday.

Additional reporting Reuters