Cost-saving store closure plan costs M&S two thirds of profits

  • Cost-saving store closure plan costs M&S two thirds of profits

Cost-saving store closure plan costs M&S two thirds of profits

Turnover was broadly flat at £10.7bn.

The closures represent around a tenth of the clothing and food group's United Kingdom stores, as it grapples with weak consumer spending and intense competition from supermarkets, fashion chains like Zara and H&M as well as online giant Amazon.

The dismal update comes just a day after the company said it would call time on 14 stores, putting 872 jobs at risk in a move that will see 100 shops close by 2022.

The restructuring was accelerated last previous year.

On Tuesday M&S said it would close 100 United Kingdom stores by 2022, as it strives to make at least a third of clothing and home sales online.

Total UK sales grew 1.8 percent to 9,611.0 million pounds as UK costs were up 1.8 percent during the year due to costs of new space, inflation and channel shift offset by efficiencies and lower incentive costs.

"These, together with a challenging United Kingdom consumer market, mean that we have to modernise our business to ensure we are competitive and reignite our culture", it said. Announcing the annual results, he said events in the retail market, where household names are struggling or closing, had convinced him M&S needed to speed up its efforts.

That was ahead of analysts' average forecast of £573m but down from £613.8m made in 2016-17.

Pre-tax profits have fallen by more than two thirds to £66.8 million for high street giant Marks and Spencer.

Marks & Spencer (M&S), one of the best known names in United Kingdom retail, first said it would reduce the amount of store space devoted to clothing and homewares in 2016, shortly after company lifer Steve Rowe became chief executive.

"The team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business".

In the final quarter of 2017, like-for-like (LFL) food sales in the United Kingdom declined 0.4% year-on-year, joining the Clothing & Home division in the ex-growth doghouse; the latter saw LFL sales decline 2.8% from a year earlier.

"Whilst we think that it is too early for the full impact of the Sugar Tax, in the United Kingdom and Ireland, to be fully realised we will look for comments around the initial implementation and feedback from customers", its analysts said in a note earlier this month.

M&S is not alone in finding the going tough.

And Toys R Us, electricals group Maplin and drinks wholesaler Conviviality have all collapsed this year.