M&S to close even more of its stores

High street giant reveals 10% drop in profits

HIGH street giant Marks & Spencer has upped plans for store closures as it revealed a 10% slump in profits.

The struggling giant previously said it wanted to shut about 100 combined clothing and food stores by 2022. But yesterday it signalled plans to increase that to 120 by 2024.

Some 35 stores had already closed by March this year, plus another 13 since.

M&S said around 70% of staff in stores which closed have moved to other branches. However, around 300 workers who chose not to go lost their jobs in the past year.

M&S also announced plans yesterday to close 25 smaller Simply Food branches. However, it is also opening 75 larger food branches. The firm insisted that it would have around the same number of stores overall – about 600 – at the end of the programme.

Chief executive Steve Rowe said: “Our strategy is as much about right sizing, relocating and new openings as it is about closures.”

Professor John Colley, of Warwick Business School, said: “Many stores are now in the wrong place as city centre shopping activity has shrunk and often moved. M&S stores are frequently marooned in now run-down parts of cities.”

The details came as M&S announced profits of £523.2million for the year to March 30, down 9.9% on the previous year, and nearly half the £1billion a decade ago. Shares fell as the results confirmed a hefty cut to its dividend payout.

Mr Rowe said there were “green shoots” of a turnaround, but that mistakes had been made. Sales in its womenswear arm – which includes a tie-up with TV presenter Holly Willoughby (left) – dropped 1.6%. Food sales fell 2.3%. M&S also released details of a £601.3m rights issue to finance its joint venture with online grocer Ocado.

The investor cash call will help fund the deal with Ocado to boost its food offering and online delivery service.