M&S enters joint venture

Marks and Spencer Group plc (Marks & Spencer) and franchise partner COMS have entered into a joint venture, with Marks & Spencer acquiring approximately 51% of COMS, a.s. for €13.6m in cash plus deferred consideration of up to €5.2m in cash based on business performance and the achievement of agreed targets.

COMS, a.s. operates 13 Marks & Spencer stores in the Czech Republic, Slovakia, Latvia and Lithuania. The joint venture plans to open around 30 stores in these markets, together with Estonia, over the next few years.

This announcement is in line with Marks & Spencer’s plans to invest in its existing franchise partners where it will facilitate a faster pace of growth and greater operating efficiency. Marks & Spencer plans to grow its international business to 15-20 per cent of Group revenues within the next five years.

COMS, a.s., one of Eastern Europe’s leading private sector companies, has been a franchise partner of Marks & Spencer since 1996 and has exclusive rights to operate Marks & Spencer stores in the countries under a franchise agreement. Marks & Spencer has purchased approximately 51 per cent of the share capital of COMS, a.s. from Dušan Mrozek and Zbynek Mrózek, through its wholly-owned subsidiary Marks and Spencer International Holdings Limited.

Carl Leaver, Director of International Business, Marks & Spencer, said: "There is a great opportunity to open many more Marks & Spencer stores across Central and Eastern Europe and grow a real presence in the region. The Marks & Spencer brand is already well-recognised in the Czech Republic and there is increasing demand for good quality, great value products in markets like Slovakia. We have worked with the COMS team since 1996 and their retail expertise and local knowledge make them the ideal partner."

Dušan Mrozek, Chairman of the Board of Directors, COMS, a.s. said: "We have worked with Marks & Spencer since 1996 and during that time we have always felt we’ve been working with the right partner. We are therefore pleased that we have successfully completed broader discussions and will now set up a joint venture. We look forward to expanding our business across the region to strengthen our market position."