Marks and Spencer is speeding up plans to close stores that are not performing well due to a difficult year for the British High Street.
The company has revealed that under performing stores will shut, and the expansion of its Simply Food chain is slow.
The group said it would further “reshape” the clothing and home arm to focus on the most successful locations, while also driving more online sales.
It will also slam the brakes on its Simply Food store opening programme amid “difficult” trading and launch a “significant” cost review under the next push of its turnaround plan.
Half-year figures showed a 5.3 per cent fall in underlying pre-tax profits to £219.1 million for the six months to September 30.
Bottom line profits jumped to £118.3 million from £25.1 million a year earlier thanks to a boost from its international arm after exiting loss-making markets.
Like-for-like sales improved in its embattled clothing and home arm, down by a better-than-feared 0.1% in its second quarter after a 1.2 per cent fall in the previous three months.
M&S said revenues overall had stopped falling in the division, while its action to cut the number of clearance sales saw full-price sales surge by 5.3 per cent.
Food sales came as a disappointment though, down 0.1% in the second quarter, as the group admitted it needed to review prices and ranges.
Chief executive Steve Rowe said: “The business still has many structural issues to tackle as we embark on the next five years of our transformation, in the context of a very challenging retail and consumer environment.”
The group also confirmed it has launched the hunt for a successor to finance chief Helen Weir, who is leaving to pursue a “plural career” and seek a variety of board positions and advisory roles.
She will remain in the role until a successor is found.
The group’s plans to step up its overhaul comes a year after it first announced that it would shut 30 of its larger UK stores, with a further 45 being downsized or converted to food-only, while also axing 53 loss-making international stores.
It has so far completed six of the 30 announced UK closures.
Mr Rowe remained tight-lipped on which further outlets would close and the number of staff impacted, saying they were taking it on a “store by store basis”.
But he sought to assure that staff affected would be offered the chance to relocate wherever “feasible”.
He said only a handful of employees had chosen to take redundancy so far under the store overhaul.
The group’s curtailed plans for the food business will now see it open 80 Simply Food shops this financial year, having previously aimed for 90 stores.
Published at Wed, 08 Nov 2017 14:05:00 +0000