Staff braced for announcement as retailer’s restructuring plan gathers pace
Hundreds of Marks & Spencer staff will find out as soon as Monday whether their store is closing, as the retailer accelerates its retrenchment from struggling UK high streets.
The M&S chief executive, Steve Rowe, is shutting 100 of its large clothing and food shops amid falling sales and profits. It has already closed 20, affecting about 900 jobs, but staff are braced for the axe to fall on another tranche of stores before the announcement of its annual results on Wednesday.
The closures are part of a plan announced 18 months ago to slash the amount of shopfloor space devoted to its ailing clothing ranges. Initially, just 30 out of a group of 105 underperforming stores were to shut but Rowe has decided on a more aggressive closure plan as sales move online.
The City is expecting M&S to report a second year of falling profits with analysts pencilling in pretax profits of £573m, down from £614m in 2017. Clothing and home like-for-like sales are forecast to be down 1.1%, with food sales dropping by 0.2%.
After several years of disappointing financial results, the restructuring at M&S has entered a more radical phase since Archie Norman was installed as chairman. There have been a number of casualties in the boardroomincluding Andy Adcock, the boss of its upmarket food halls, who has been replaced, and marketing chief Patrick Bousquet-Chavanne.
When the company updated investors six months ago, Norman was frank about the scale of its problems. M&S had been “drifting” for more than 15 years, he said, as he promised to speed up store changes and tackle its misfiring food business.
Rowe has been in charge for two years but, with no green shoots to celebrate and a backdrop of weak consumer spending, M&S’s share price has fallen by nearly a quarter over the past year.
The decline means the 134-year-old retailer’s place in the prestigious FTSE 100 could now be in jeopardy. M&S has been a member of the blue chip index since its inception in 1984 but could be relegated to the FTSE 250 in a stock exchange reshuffle this week. Relegation would be a symbolic moment for the British institution that has struggled to hang on to shoppers in a digital age.