Marks & Spencer has announced plans to close more than 100 stores by 2022 as part of a “radical transformation” of the company.
The retailer said the 100 stores earmarked for closure includes 21 that have already shut this year and 14 stores announced today. The locations of the other 65 stores to close are yet to be announced.
The company said: “Alongside relocations, conversions, downsizes and the introduction of concessions, these closures will radically reshape M&S’s Clothing & Home space.”
The group has struggled to improve the performance of its clothing business, in particular, over recent years, and said it is aiming to take ”at least a third” of sales online.
Diane Wehrle, insights director of retail consultancy Springboard, said the retailer “clearly has an issue with market share”, explaining that the high street stalwart has “lost the traditional M&S shopper” to rivals.
“They need to think carefully about their customer offering and the way they present their stores,” she said, commenting that the company is “remarkable unimaginative” when it comes to the layout of their shops.
Ms Wehrle added that the market was anticipating a poor set of results from the retailer on Wednesday, with sales expected to be down by at least 3 per cent in the clothing side of the business.
The next 14 clothing and home stores that will close or are proposed for closure in 2018/19 as part of the transformative programme are:
Bayswater, Fleetwood Outlet and Newton Abbot Outlet – all three of which will close by the end of July 2018;
Clacton and Holloway Road – which will both close by early 2019 to coincide with new nearby Food stores opening;
Darlington, East Kilbride, Falkirk, Kettering, Newmarket, New Mersey Speke, Northampton, Stockton and Walsall – all nine of which are proposed for closure and will now enter a period of consultation with all 626 affected employees. The company said if these stores close, all colleagues would be redeployed or offered redeployment at other stores before redundancy is considered.
Sacha Berendji, retail, operations and property director at Marks & Spencer, said: “We are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans. Closing stores isn’t easy but it is vital for the future of M&S.
“Where we have closed stores, we are seeing an encouraging number of customers moving to nearby stores and enjoying shopping with us in a better environment, which is why we’re continuing to transform our estate with pace.”
Gary Carter, GMB National Officer, said staff across the retail sector would be “shocked that a big name such as M&S” is planning to close 100 stores. “This is a sad reflection on the flat-lining economy and the continued slump in consumer purchasing due to long-term squeeze on incomes,” he added.
The British high street has been hit hard by the squeeze on consumers’ purses this year, with a number of well-known brands, including Toys R Us, Maplin and Bargain Booze owner Conviviality, going into administration over the last few months.
Meanwhile, with sales growth harder to come by, companies in the supermarket space are looking to consolidation to boost their balance sheets, as is the case with Sainsbury’s proposed merger with Asda.
“The loss of M&S stores will hit local economies and communities hard,” Mr Carter added.
“Britain needs a pay rise to get consumer shopping going and employers need to invest in stores and the customer experience with well trained and fairly paid employees.”
Meanwhile, shopworkers’ union Usdaw called on M&S to begin talks to ensure employees affected by the closures are properly represented.
“This salami slicing approach to reorganising the business is extremely distressing for the staff,” said Usdaw national officer David Gill. “At this time of great uncertainty, staff need to be assured that an experienced and knowledgeable trade union is interrogating the company’s business case for this store reorganisation.”
M&S was expected to announced up to 40 store closures this week, ahead of publishing its annual results on Wednesday. Last month, the group said it was closing one of its distribution centres in September, putting a further 450 jobs in danger.
Shares in the group were down 3 per cent by mid-afternoon trading on Tuesday.
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