M&S to close more stores after plunging to £201m loss
Marks & Spencer is set to close more stores after plunging to a hefty loss for the past year after being hit hard by high street lockdowns.
The retailer said it is targeting 30 more closures in the “next phase” of its long-term transformation plan.
It has already closed or relocated 59 stores but said it is accelerating changes to its portfolio of shops following the impact of the pandemic.
The 30 planned closures will be part of a shake-up of around 110 stores, with the majority of these sites set for relocation.
M&S said the impact of the pandemic has provided it with a strong opportunity to purchase new locations, with the group currently targeting six new stores in former Debenhams units.
The group current has 254 full-line stores, which sell food and clothing, but it plans to reduce this to around 180 over the next 10 years, with some of these being replaced by food-only or purely clothing and home sites.
It follows a £67.2m statutory profit in the previous year.
The group told shareholders that total revenues dropped after this slump offset an improvement in its food operations.
It reported that food like-for-like revenues increased by 1.3 per cent over the past year but the company saw its clothing and home business report a 31.5 per cent slump despite 53.9 per cent online growth.
Clothing and home operations saw a £129.4m operating loss, although M&S said the performance improved in the second half of the year.
Meanwhile, the company said it was buoyed by its food business, which saw 6.9 per cent growth excluding its hospitality and franchise arms.
It also hailed a strong integration with Ocado after the two companies launched their online grocery joint venture last September.
The retailer said its balance sheet is also “stronger than expected” following the impact of the pandemic.
Steve Rowe, chief executive at Marks & Spencer, said: “In a year like no other we have delivered a resilient trading performance, thanks in no small part to the extraordinary efforts of our colleagues.
“In addition, by going further and faster in our transformation through the Never The Same Again programme, we moved beyond fixing the basics to forge a reshaped M&S.
“With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again.
“The transformation has moved to the next phase.”
The group also said it expects to be hit by between £42m and £47m in Brexit costs for the current year, particularly affecting its business in the Republic of Ireland and Northern Ireland.