Marks & Spencer performed a strategic U-turn yesterday when it announced it was keeping its Kings supermarket business in the United States, six months after putting the business up for sale.
When M&S said it was selling Kings last September, Peter Salsbury, chief executive, said the business had limited scope for growth.
Yesterday he appeared to have been over-ruled by M&S's new chairman Luc Vandevelde who visited Kings recently and was apparently impressed.
"Luc is more of an internationalist than Peter and if he can see a chance to expand overseas he'll take it," one M&S insider said.
The company said that Kings continued to trade well but that valuations for food retailers in the United States had declined significantly in the last six months.
Though M&S had been in talks with DiGiorgio, an American company that owns the Ballys casino chain, the two could not agree a price. It is thought M&S was looking for around £200m.
There were rumours earlier this year that M&S's talks with DiGiorgio had broken down but the company denied it.
Kings operates 25 supermarkets in New Jersey and recorded profits of £10m on sales of £254m.
The UK retailer had previously felt that the business lacked scale to compete in the cut throat American grocery market.
Yesterday, Guy McCracken, director of M&S's international retail businesses said he looked forward to "the successful growth and development of the business".Reuse content