HIGH street giant Marks and Spencer has publicized that it will close dozens of clothing and home stores over the next five years. Marks and Spencer plans to close 53 loss-making outlets in 10 countries around the world and about 60 in the UK.
The retailer said that as expected, underlying profits were down in the half due to lower Clothing & Home sales. Non-underlying items include significant charge relating to pension changes. It would now focus International business on a franchise model, exiting the loss-making owned business across ten markets, at a non-underlying cost of £150m-£200m over the coming 12 month period, thereby eliminating annual losses of £45m.
A Five-year plan to improve productivity of UK Store Estate will be implemented by repositioning c.25% of Clothing & Home space with costs of c. £50m per annum for the first three years and continued rollout of Simply Food stores.
Steve Rowe, M&S CEO, 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.
“In addition, we have made major steps towards fairer pay and pension arrangements, streamlined our senior management team and our plans to implement a simpler Head Office structure are well underway.
“We have now completed a forensic review of our estate both in the UK and in our International markets. Over the next five years we will transform our UK estate with c.60 fewer Clothing & Home stores, whilst continuing to increase the number of our Simply Food stores. In the future, we will have more inspiring stores in places where customers want to shop that complement our growing digital offer.
“Internationally, we propose to cease trading in ten loss making owned markets, but intend to continue to develop our presence through our strong franchise partners.
“These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns.”