M&S to axe stores as Rowe beats a re­treat

China Daily (USA) - - BUSINESS - By BLOOMBERG

Marks& Spencer Group Plc an­nounced plans to shut 30 cloth­ing stores in the United King­dom and switch oth­ers to food-only out­lets as Chief Ex­ec­u­tive Of­fi­cer Steve Rowe un­winds the ex­pan­sion ef­forts of his pre­de­ces­sor and seeks to re­verse years of lack­lus­ter per­for­mance.

The re­tailer will also shut­ter 53 stores out­side the UK and be­gin con­sul­ta­tions with 2,100 work­ers as it re­treats from 10 coun­tries in­clud­ing China and Bel­gium, it said on Tues­day, while cut­ting its mar­gin out­look for the year.

“M&S have been try­ing to dig their gen­eral-mer­chan­dise busi­ness out of trou­ble for sev­eral years, but for now it seems that the time has come to stop dig­ging,” said Phil Dor­rell, part­ner at con­sul­tant Re­tail Rem­edy.

“By clos­ing stores and cut­ting jobs with­out an ac­com­pa­ny­ing an­nounce­ment on a new strat­egy, M&S are giv­ing in.”

M&Svet­eran Rowe is tak­ing im­me­di­ate ac­tion to ad­dress the fash­ion re­tailer’s strug­gles at home and abroad af­ter re­plac­ing Marc Bol­land as CEO this year.

Do­mes­tic cloth­ing sales have been in near con­stant de­cline for five years as shop­pers de­fect to nim­bler ri­vals such as Hennes & Mau­ritz AB and In­di­tex’s Zara.

In­ter­na­tional earn­ings have been weighed down by weak de­mand in Europe and tur­bu­lent eco­nomic con­di­tions in Asia and the Mid­dle East.

The do­mes­tic clo­sures will take place over five years, M&S said, with­out dis­clos­ing how many jobs will be lost.

The down­siz­ing rep­re­sents the end of an era for the 132year-old com­pany that was long re­garded as the bell­wether of UK re­tail­ing.

“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,” Rowe said in the state­ment.

The do­mes­tic clo­sures will re­duce the amount of space de­voted to cloth­ing and home wares by 10 per­cent, said the com­pany, which has 304 UK cloth­ing and home stores.

Taken to­gether, Rowe’s ac­tions will lead to the loss of 60 cloth­ing out­lets.

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