Marks & Spencer is expected to announce the closure of up to 30 stores next week as part of an attempt to revive the British retailer.
The move comes after M&S announced plans to cut 525 London head office jobs as part of Rowe’s attempts to reduce costs and simplify the business.
Smaller outlets in flagging towns and shopping centres are likely to form the bulk of the closures, and other stores could be relocated or downsized over several years, potentially leading to thousands of job losses.
Sources told Sky News, which first reported the closures, that they would number “in the low dozens”.
Like others on the high street, M&S is struggling to adapt to changing shopping habits. As more people make purchases online, smaller or less attractive town centres and shopping centres are losing out.
Clothing retailers have had a difficult year of unseasonal weather, while shoppers have been spending more on eating out, holidays and technology, and less on fashion.
The M&S chief executive, Steve Rowe, is expected to announce the store cuts as part of a wide strategic rethink. He is also expected to close stores in China, where M&S has found trading tough, and signal further shutdowns in continental Europe.
Rowe is expected to focus instead on expanding M&S’s successful food business, which plans to add 200 small shops by 2019.
He is attempting to turn around M&S after the biggest fall in its clothing sales since the 2008 financial crisis.
Last year M&S closed a net five “discount” stores and one high street outlet in the UK, but increased total trading space slightly by opening dozens of franchised Simply Food stores. The group closed 13 stores in Europe last year.
M&S has about 300 full-range stores, 640 food-only outlets, 131 of which are larger food halls, and more than 400 stores overseas.
Tony Shiret, an analyst at Haitong, said M&S probably needed to close more than 30 stores, given the changing nature of shopping and years of poor performance by the retailer’s clothing ranges.
“There are a lot of traditional high street shops that have not had a lot of money spent on them for a long time,” he said, suggesting that M&S should shut 20% of its space, as many as 60 stores.
But he added: “It’s not that easy to close that amount of space and when you do, it puts pressures on your supply chain.”
0 comments: