M&S to Close More Than 100 Stores Amid Online Push

Marks and Spencer

Marks and Spencer

Excluding the restructuring charge, the stores group's adjusted pre-tax profit was down 5.4% to £580.9mln from £613.8mln past year, weighed by a 140 basis points drop in the food gross margin as a result of a weaker pound pushing up input cost inflation. Worldwide sales fell 7.9 percent to 1,087.2 million pounds during the year while global profit before adjusting items more than doubled to 135.2 million pounds.

M&S chief executive Steve Rowe said there was need for "accelerated change" at the retailer.

M&S is one of the UK's leading retailers, offering own-brand food, clothing and home products in its 1,433 stores worldwide and online.

The radical change in how consumers buy their clothes today is why M&S is hanging by its fingernails onto the top spot as the UK's largest clothing retailer, where it now commands just over 8% of the market, and others have to make themselves distinctive in either inventory, price, or both, to stay ahead.

"We have been clear about our plans to accelerate our store closure program and the action we must take to build a business with sustainable, profitable growth", an M&S spokesperson said. This is said to be a result of M&S's successful exit of loss-making owned markets and favourable currency effects.

"These changes come with short-term costs which are reflected in today's results". M&S attributed this decline to the planned removal of two clearance sales and unseasonal trading conditions during the second half of the year.

M&S has struggled to grow fashion sales for years
Image M&S has struggled to grow fashion sales for years

M&S warned that an increasing shift in consumer behaviour towards online shopping for fashion, growth in home food delivery and competition from discounters Aldi and Lidl "all amount to threats to our business and market position".

"The first phase of our transformation plan".

The decision to accelerate the closure program was prompted by early results from the closure of a store in Warrington town centre which led to increased sales in a newer off-high-street store nearby.

The company is seeking to reduce costs by at least £350 million, although its dividend will be maintained at its current level.

The British retailer has extended its closure plans as it is focusing on a minimum of a third of its sales online, as per the statement made by the high-street chain.

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