M&S to remove clothing brand as part of major overhaul

Posted by Simon Hadley in Personal Finance on 9 November 2016 - Simon is a Credit Analyst at checkmyfile.

Marks & Spencer (M&S) is set to close up to several of its clothing and homeware outlets in a major overhaul.

New chief executive, Steve Rowe, has told the City that his vision also includes opening 200 new Simply Food stores, as well as changing the floor space in 100 existing stores in a bid to revamp its clothes-heavy image.

Due a lack of poor clothing sales, which has contributed to falling profits since the second quarter of the year, M&S is also planning to close shops in 10 overseas markets including China, Poland and France.

“Over the next five years we will transform our UK estate with circa 60 fewer clothing and home stores, whilst continuing to increase the number of our Simply Food stores,” says Mr Rowe.

"This is about building a sustainable, more profitable business that's relevant for our customers in a digital shopping age."

The clothing section of the business has entered a fifth successive year of poor sales - falling by 5.9% from last year - due to cheaper alternatives offered by rival retailers such as H&M, Primark and the rise of Zara, whose online market is thriving.

Speaking about the forthcoming changes, Mr Rowe says that the initial feedback from customers “has been good” while M&S has also “improved the fit on many garments and for the first time in a number of years.”

Although Mr Rowe has yet to announce how many jobs will be lost in UK stores - having cut 525 head office jobs in September - 2,100 jobs will be lost overseas, as 10 stores in China and 7 in France are set to close, including its largest European store on the Champs Élysées. Stores in Belgium, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia will also close within the next 12 months.

“As customer shopping patterns change and customers migrate online, we need to manage our estate proactively to ensure that our clothing and home space is relevant for our customers and profitable for our shareholders.

“In total, M&S expects to have more stores, in more convenient locations for our customers, offering greater employment opportunities for employees,” says a spokesman for M&S.

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