British retail slump worsens with M&S store closures
Irish stores will not be affected by Marks & Spencer’s plan to close more than 100 of its clothing and home stores in the next five years, the company has said.
M&S said over 100 stores across the UK — a third of its clothing and home stores —would close in total by 2022 as part of a “radical transformation plan”, sending its shares down almost 3%.
The firm announced 14 more stores to close this year or next, on top of 21 it has previously closed. The stores are located across Britain.
A spokeswoman in London said operations in the Republic were not part of the plan, and that in the North, a previous store relocation in Newry was considered part of the 21 previously closed.
The London-based retailer intends to increase the proportion of online clothing sales to one-third, from about 18% now.
“This will probably still leave them with too much store space. M&S has to get its clothing and home stores down to a much smaller number unless they can demonstrate there is a real purpose to them,” said Bloomberg Intelligence analyst Charles Allen.
After years of putting off store closings, M&S is taking more drastic action to halt its loss of market share to online rivals and discounters under chairman Archie Norman.
Sainsbury’s $10bn (€8.48bn) acquisition of Walmart’s Asda will create the UK’s largest retailer and intensify the pressure on M&S in clothing and food.
Online shopping accounts for 22% of non-food retail sales in the UK, according to the British Retail Consortium.
M&S said its remaining clothing and home stores will be larger and more oriented around technology.
It also said it will open 15 fewer Simply Food outlets this year — it had planned to open 200 more food stores from 2017.
M&S, which reports full-year results today, has more than 1,000 stores, but nearly 700 of them sell food only.
The firm said it was dropping prices on 200 food lines in the Republic, saying Irish shoppers would see a 24% average decrease.
The store closures comes as Tesco said it plans to shut down its non-food website Tesco Direct in Britain, with 500 jobs in jeopardy.
Tesco said “despite its best efforts, there is no route to profitability for this small, loss-making part of the business”.
Meanwhile, shares in Halfords slumped more than 11% as new boss Graham Stapleton warned profit was unlikely to grow this year, held back by a lack of price rises in cycling, currency moves and increased investment in the British bicycles to car parts retailer.
