United Kingdom retailer M&S says to shut more than 100 stores
- Author: Jon Douglas May 23, 2018,
May 23, 2018, 18:24
At the end of 2017/18 M&S had 1,035 stores in the United Kingdom, with 300 Clothing, Home and Food, 696 Food-only and 39 Outlet stores. It has also scaled back the number of Simply Food stores it planned to open this year by 15.
After taking account of adjusted items of £514.1m, including the charge relating to store closures, pre-tax profit was £66.8m, a 62% fall.
The company further updated investors on its transformation programme today, with chief executive Steve Rowe saying that the first phase of the plan, dubbed "restoring the basics, ' was 'well underway".
"In the past year traditional retailers like Marks have faced a flawless storm of rising costs, a constrained consumer, and the relentless growth of online competition", said Hargreaves Lansdown analyst Laith Khalaf.
However, the M&S boss highlighted that these changes come with costs, which were reflected in Wednesday's results.
Sacha Berendji-the retail, operations and property director at M&S said that that they are making nice advancement with their plans of restructuring their store chains for making them more relevant to the customers and to assist the online growth plans.
In the three months to 30 December, M&S said like-for-like sales fell at its food business, where sales had been rising, as well as at its clothing and homeware division.
The shares were up 2.02pc at 297.7p mid-morning. Whilst the fulfilment centre at Castle Donington has struggled to cope with peak demand and some of its systems are dated. "The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business", Rowe added. "In both businesses we need to revitalise our ranges and reassert our reputation for value for money".
One key question is: will those lost fashion and home sales be recaptured online or in the fewer but better physical locations in the future? "Alongside relocations, conversions, downsizes and the introduction of concessions, these closures will radically reshape M&S's clothing and home space".
Shares in the 134-year-old British retailer were up 5.4 percent at 0720 GMT as the underlying profit figure beat analyst forecasts and it maintained its dividend, while turnover was broadly flat at 10.7 billion pounds.
Food margins are expected to remain under pressure in fiscal year 2019, with the company predicting a decline of up to 50 basis points.