M&S redeploying staff to foodhalls as clothing sales slide

● Retail stalwart releases unscheduled update amid coronavirus upheaval

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Marks & Spencer is to redeploy “significant numbers” of staff to support its food business after a slump in clothing and homeware sales amid the Covid-19 outbreak.

Becoming the latest big name to update the stock market in light of the coronavirus crisis, the high street stalwart also said it was preparing for the contingency that some stores may have to close temporarily.

The group, which is already goingthroughamajorrestructuring involving several store closures, is to take a number of measures including postponing capital expenditure, deferring all pay increases, reducing the supply pipeline by more than £100 million and holding over stock.

It is also to suspend the payment of a final shareholder dividend for this financial year, resulting in a saving of about £130m.

M&S told investors: “Our first priority is to support our customers and colleagues. M&S has served customers without cease through two world wars, terrorist bombings and numerous local disasters and we are determined to support our customers now as we always do.

“We have one of the most loyal and committed workforces in retailing and are very grateful for the extraordinary cheerfulness and dedication they are showing in difficult times.

“We are seeing substantial sales declines in clothing and home and we have to manage our costs accordingly but expect to be able to redeploy significant numbers of colleagues to support the food business.”

The group said its business model of operating parallel clothing and food operations and its push online including its new Ocado joint venture should provide “more resilience” than some single-sector businesses.

It added: “We expect our food business to trade profitably throughout. At this stage we have benefited on a small scale as customers stock up but our heavy bias to chilled and fresh means we are not seeing the forward buying uplift experienced by the major grocers.

“The significant shift to eating in home should however continue to benefit sales in the months ahead.”

The group said its total available liquidity amounted to more than £1.3 billion though it warned over its full-year profit outcome.

Retail analysts at house brokerage Shore Capital said: “Whilst we all live in uncertain times, which is having quite extensive implications for the British economy and its component parts, we believe that M&S is a liquid and solvent business that will be trading through the present crisis and thereafter.

“It is arguably much more liquid than Next, which stated the necessity to mitigate solvency challenges [earlier this week]. The steps that M&S is taking are, like those of others, tough but responsible and necessary in their own right.”

M&S is expected to release full-year preliminary results on 20 May.