FTSE scales fresh high but M&S falls on store closures

  • FTSE scales fresh high but M&S falls on store closures

FTSE scales fresh high but M&S falls on store closures

Of the 100 M&S store closures, 36 locations have been announced with the sites of the further 64 stores yet to be revealed.

Marks & Spencer signs are seen outside outside a store in London, Britain January 8, 2014.

In a statement, the company said there will be relocations, conversions, downsizes and the introduction of concessions, to "radically reshape" M&S's Clothing & Home space.

The announcement that 15 fewer Simply Food stores will now open comes as the company announces wider plans to close existing 100 M&S stores in the next four years. It also wants a third of sales to be generated online by 2022.

The nine remaining stores will enter a consultancy period with 626 impacted employees, who will either be redeployed or made redundant.

Marks and Spencer plans to step up its store closure programme after finding that a high proportion of customers tend to shop at alternative branches rather than abandoning the brand altogether when their local store shuts.

The closures unveiled today are part of a five-year turnaround plan spearheaded by chairman Archie Norman and chief executive Steve Rowe. "Where we have closed stores, we are seeing an encouraging number of customers moving to nearby stores and enjoying shopping with us in a better environment".

At the time M&S said it would axe about 60 stores across the United Kingdom - possibly affecting around 2,000 jobs.

The retail giant says it is "accelerating" its strategy transformation strategy launched in November a year ago as it focuses more on food and online sales.

Marks & Spencer retail, operations and property director Sacha Berendji described the closures as not easy, but "vital for the future of M&S". Its position seemed unassailable, but since then its market share has been on a declining trend, Hinton explains.

GlobalData has forecast that its clothing market share will be 7.6% this year - nearly halving in two decades - despite opening more stores selling clothing, homewares and food under the one roof.

M&S had in November 2016 launched a five-year overhaul of its United Kingdom stores amid fierce competition from supermarkets and budget garment chain Primark - as well as online giants like Amazon.

HSBC analyst Paul Rossington said: "We have previously argued that focus on convenience/food-to-go and a premium own-label offer afforded M&S a defensible point of differentiation. Closing stores will make its space more productive and help to improve profitability, but it still has not solved its fundamental problem - top-line growth".