Marks & Spencer casts eye over Latin America

Marks & Spencer, the high street retailer, is exploring the possibility of opening stores in Latin America as the next stage of an aggressive world-wide expansion plan. It will send a team, led by Chris Littmoden, executive director of the group's North American retail operations, into Brazil, Chile and Argentina in the next few months.

The team will also check out the Mexican market, though M&S said plans there were longer term.

The clothing group said it had opened its 10th store in Hong Kong at the weekend and planned to open another two in the region in the next 12 months. M&S, already the largest franchise store in South East Asia, also plans to expand in Indonesia and set up in Australia.

M&S's rapid expansion outside the UK is prompting Dewhirst, the retailer's second-largest supplier of men's and women's clothing, to follow.

Speaking at the group's half-year results to July, Tim Dewhirst said the company, which makes 88 per cent of its sales from M&S and supplies no other retailer, was planning to spend pounds 50m in the next two years on warehousing and factories, including two new factories in Morocco and a new plant in Indonesia which will make men's formal shirts.

Dewhirst has two factories in Morocco and sources from third parties in Indonesia.

The three new factories, which should open within 12 months, are thought to cost around pounds 4m each.

Mr Dewhirst said it was vital to move to where M&S needed it.

"We must be able to respond quickly. We work hand in glove with them. It's a real partnership," he said.

Dewhirst, one of the UK's best textile companies in a sector beset by falling prices, sources a third of its total output outside the UK, but reckons that proportion will grow to 50 per cent in three years.

Increased efficiency and higher volumes driven by innovations such as non-iron fabrics left Dewhirst's interim sales up a fifth to pounds 177m and margins 0.4 points higher at 7.8 per cent.

A spokeswoman for M&S, which, unusually for a UK retailer, has successfully built its brand overseas said: "Our ambition is to be a global brand. South America is in the early stages, but we have been sufficiently encouraged by an intial report to send a team there."