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Cost-saving store closure plan costs M&S two thirds of profits

Cost-saving store closure plan costs M&S two thirds of profits

It is just one of a few United Kingdom high street giants who have announced store closures and job cuts.

Marks & Spencer said in a statement this morning that its profit before tax had slumped 62.1 percent to £66.8 million in the 52 weeks ended March 31.

Marks & Spencer (M&S), one of the best known names in United Kingdom retail, first said it would reduce the amount of store space devoted to clothing and homewares in 2016, shortly after company lifer Steve Rowe became chief executive.

Shares in the 134-year-old clothing and food retailer rose as much as 6.5 percent on Wednesday after its underlying profit for 2017/18 beat analyst forecasts, it held its dividend payout and investors covered short positions.

Britain's Marks & Spencer MKS.L said on Wednesday it urgently had to modernise or risk fading away as it reported a second straight decline in annual profit and booked a 321 million pounds charge for a store closure programme. Actions taken under the plan include the sale and franchise of the firm's retail business in Hong Kong and Macau.

M&S lost more ground in the fourth quarter, with like-for-like clothing and home sales down 3.4 percent, worse than the previous quarter's 2.8 percent drop, and same store food sales down 0.6 percent, against a third quarter 0.4 percent fall. The announcement is in line with the next tranche of United Kingdom stores proposed for closure or set to close as it reshapes its United Kingdom store estate in line with its target to take at least a third of sales online. It is now worth less than both online grocer Ocado (OCDO.L) and online fashion website ASOS (ASOS.L), starkly illustrating how shopping habits have changed in only a decade.

Jerusalem soccer club seeks to change name to honor Trump
Palestinians want their own state with their capital in East Jerusalem which Israel captured from Jordan during the war in 1967. President Donald Trump's decision previous year to recognize disputed Jerusalem as Israel's capital and move the U.S.


"If anything the need for change has become more urgent".

"There are a number of structural issues to address and we are taking steps towards fixing these", Mr Rowe added. "Alongside relocations, conversions, downsizes and the introduction of concessions, these closures will radically reshape M&S's clothing and home space".

"The team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business", he said, targeting sustainable, profitable growth in three to five years.

"In the past year traditional retailers like Marks have faced a flawless storm of rising costs, a constrained consumer, and the relentless growth of online competition", said Hargreaves Lansdown analyst Laith Khalaf.

Liberum maintained a "sell" rating on the stock, saying the full year results "leave us unable to see any evidence yet of progress on the transformation strategy".


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