M&S closes stores to focus on food
Marks & Spencer has announced store cuts as part of a wide strategic shake-up.
M&S chief executive Steve Rowe (pictured right) has announced the closure of 30 stores in order to focus on expanding M&S’s food business with smaller stores.
Rowe said in a statement: "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."
In the six months to 1st October 2016, M&S reported total sales of £5.0bn (+0.9% change). In the UK, food LFL sales surprisingly fell by 0.9% but, augmented by new space, total category revenues rose by 4.0%.
Clive Black, head of research at analysts Shore Capital, said: "Whilst we cannot be certain of delivery, we feel Mr. Rowe is the best chance that M&S has had in a long-time to place the retailer on a better course for shoppers and shareholders' alike."
Expansion will focus on M&S's food business, which contributes over half of group revenue and about a third of profit. In May Rowe said M&S would add an additional 200 food shops by 2019.
This follows M&S announcing plans to cut 525 London head office jobs as part of attempts to reduce costs and simplify the business.
Last year M&S closed five 'discount' stores and one high street outlet in the UK, but increased total trading space slightly by opening dozens of franchised Simply Food stores.
The retailer has about 300 full-range stores and 640 food-only outlets, 131 of which are larger food halls. It has more than 400 stores overseas.
Rowe will also close stores in China, where M&S has found trading tough, and signal further shutdowns in continental Europe.
In October M&S unveiled the Croloaf, a croissant/loaf hybrid.
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- food business
- bakery news
- Steve Rowe
- wide strategic think
- 30 stores
- head office jobs
- 200 small shops