Store closures chop M&S profits by 64pc

SLASHING jobs and closing stores sent profits at Marks & Spencer tumbling by 64pc last year as it feels the heat from a dramatic turnaround.

The shock performance of the high Street giant was coupled with a 2.8pc decline in its crucial clothing and home departments in the year to april 1 – despite it celebrating positive results after Christmas.

M&S has been hit by £400m of costs after it cut 590 head office jobs, announced it would ditch underperforming shops and sought to revive its clothing arm.

It is losing thousands of shoppers to internet brands which have fewer overheads, and rivals such as Primark and Zara.

This comes amid a squeeze on household budgets from surging inflation and a shift in spending towards leisure and meals out.

But while M&S posted profits of just £176.4m, it has sought to reassure shoppers its turnaround plan is paying off. Steve Rowe, chief executive, said yesterday: ‘I am pleased with our progress and we remain on track. as we anticipated, the planned restructuring of M&S has come with a cost and has impacted profits.’

Last year Mr Rowe, 49, announced plans to revive the department store chain’s fortunes by lowering prices, holding fewer sales and expanding its food halls.

The father- of-three also said he would close 53 stores in lossmaking countries, which included China and France.

and it is ditching poor- selling ranges Indigo, Collezione and North Coast. It was all part of Mr Rowe’s plan to encourage the core shoppers – who he dubbed ‘Mrs M&S’ – to remain loyal.

and it does appear to be paying off. Replacing endless discounts with cheaper full-price items saw M&S reduce the price of men’s polo shirts from £17.50 to £15.

These new measures helped drive the value of full-price sales up by 2.7pc.

and offering a booking service on bra fitting plumped up its bra market share to 34.9pc. Lingerie is still the jewel in the crown of the 132-year- old chain, which sold 60m pairs of women’s knickers last year, and sells bras in 70 sizes, ranging from 28aa to 46.

Elsewhere, it offers women wearable fashions rather than catwalk designs, which has lifted sales of its top 100 clothing lines 7pc. Best- sellers included a £55 pea coat, which sold 21,000.

Now it will turn its attention to casual menswear, and will bring in more natural fabrics such as linen and wool.

Rowe is pushing ahead with plans to open more Simply Food shops across the country – and is considering introducing food delivery. It has also opened 68 new food stores.

M&S boasted that it now sales 90 different sandwiches, and last year sold 100m.

The chain recently poached the chief executive of halfords – Jill McDonald – as managing director for clothing, home and beauty to lead the turnaround.

Shares closed down 1.5pc, or 5.7p, to 393.4p.

M&S announced an ordinary dividend per share of 18.7p.