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Marks and Spencer to close 30 stores after £200m losses
26 May 2021, 11:16
Marks and Spencer has announced it will speed up the closure of 30 stores as the retailer feels the impact of the pandemic.
It has already closed or relocated 59 stories but has said it is accelerating the “next phase” of its long-term transformation plan after suffering a £201.2 million pre-tax loss for the year to March 27.
Whilst food sales were up, sales in the home and clothing sections slumped as a result of high street lockdowns, although they have improved since non-essential retail opened up again on April 12.
Steve Rowe, chief executive at Marks & Spencer, said: "In a year like no other we have delivered a resilient trading performance, thanks in no small part to the extraordinary efforts of our colleagues.
"In addition, by going further and faster in our transformation through the Never The Same Again programme, we moved beyond fixing the basics to forge a reshaped M&S.
"With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again.”
The retail giant said it was buoyed by its food sales, helped by its strong integration with Ocado after the two companies launched their online grocery joint venture last September.
However, whilst the pandemic is providing opportunities for M&S, the group is also expecting to be hit by between £42 million and £47 million in Brexit costs for the current year, particularly affecting its business in the Republic of Ireland and Northern Ireland.
M&S has not yet revealed the list of stores it has earmarked for closure.
The planned closures will be part of a shake-up of around 110 stores, with the majority of these sites set for relocation.
The group current has 254 full-line stores, which sell food and clothing, but it plans to reduce this to around 180 over the next 10 years, with some of these being replaced by food-only or purely clothing and home sites.
M&S is not the first retailer to feel the strain of a year of on-and-off Covid restrictions.
Debenhams closed its doors completely on May 15 after its financial woes were exacerbated by the pandemic, although it sold its brand and website to online retail giant Boohoo.
In a similar move, Topshop, Topman, Miss Selfridge and HIIT were sold to ASOS after the impact of Covid-19 forced the Arcadia Group into administration.
However, there are signs that the high street is beginning to recover.
The Office for National Statistics (ONS) revealed data last week that showed in-store high street sales had rocketed as non-essential shops reopened on April 12.
Sales were almost double what they were in April 2020, when the country was in lockdown.
The next phase of the government’s roadmap out of lockdown is currently due to take place on June 21, although the rise in cases of the Indian variant may derail the plans.
Surge testing, new guidance and a ramped-up vaccination programme have been employed in areas where the Indian variant is circulating.