M&S to ratchet up store closures

British retailer Marks & Spencer (M&S) plans to close more than 100 stores in its home market by 2022, accelerating a drive to reshape its business.

British retailer Marks & Spencer (M&S) plans to close more than 100 stores in its home market by 2022, accelerating a drive to reshape its business as it strives to make at least a third of sales online.

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

M&S, one of the best-known names in UK retail, first said it would reduce the amount of store space devoted to clothing and homeware in 2016.

Then in November 2017, three months after retail veteran Archie Norman joined as chairman, the company said it would speed up the programme. It said it had not lost as many customers as expected when stores closed, making quicker and further closures viable.

Tuesday’s announcement represents a further step-up of the plan. The figure of more than 100 closures includes 21 that have already shut and 14 stores newly identified for closure.

M&S also said 15 fewer company-owned Simply Food stores would open in 2018.

At end-March, the retailer had 1,035 UK stores, made up of 300 clothing, home and food stores, 696 food-only stores and 39 outlets.

About 18% of M&S’s clothing and home sales are made online. It does not sell groceries online, though it is carrying out trials.

“Alongside relocations, conversions, downsizes and the introduction of concessions, these closures will radically reshape M&S’s clothing and home space,” the company said.

The latest tranche of closures will affect 626 employees.

“Closing stores isn’t easy but it is vital for the future of M&S,” retail director Sacha Berendji said.

The M&S share price was down 3% in midmorning trade.

M&S is expected to report a second consecutive fall in annual profit on Wednesday, and with the retailer’s shares down nearly a quarter over the past year it is in danger of soon being booted out of the FTSE 100 index.