Marks & Spencer to close 60 UK clothing and home stores
Marks & Spencer has said it plans to close around 60 UK clothing and homewares stores as it reported that its six month underlying pre-tax profits have dropped by 18.6% to £231.3 million.
In a statement, the company said it will transform its UK estate over the next five years while continuing to increase the number of Simply Food stores.
Steve Rowe, Marks & Spencer chief executive, said: “In May, we laid out a number of questions which we would answer as part of our strategic review. We committed to creating a simpler business with customers at its heart, and taking action to start to recover our Clothing & Home business and continue to grow in Food.
“Our aim is to build a sustainable business which will delight our customers, provide a robust foundation for future growth and deliver value for our shareholders in the long term. We have made good progress on our plans and customers are already noticing a difference, particularly in Clothing & Home.”
Looking overseas, Marks & Spencer is proposing to close 53 stores as it exits 10 loss-making owned markets in China, France, Belgium, Estonia, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia.
While total revenue was flat in the six months to 1 October, food sales grew by 4% on a total basis but declined by 0.9% on a like-for-like basis. Total clothing and homeware sales fell by 5.3% while like-for-like sales declined by 5.9%.
In the UK total sales rose by 0.1% but fell 3% on a like-for-like basis. International sales dropped by 1%.
Marks & Spencer said product was key to recovering and growing its clothing and home sales. It now has 10% fewer clothing lines and has introduced a more contemporary colour palette for the autumn
It has also changed the layout of its stores with more of clothes grouped together in product categories, rather than in brand co-ordinated departments. In addition, the company has hired 3,300 new customer assistants in areas such as fitting rooms and till points.
Marks & Spencer said the performance of new Simply Food stores was ahead of expectations with stores opened in the past year exceeding sales forecasts by 17%. It is planning to open over 200 new Simply Food stores by the end of 2019.
Commenting on the review of the store estate, Rowe said: “These are tough decisions, but vital to building a future Marks & Spencer that is simpler, more relevant, multi-channel and focused on delivering sustainable returns.”
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