Possible more M&S stores to close, boss warns
More M&S stores may have to close, warns Chairman Archie Norman. M&S is currently struggling to improve its economic outlook. In other words, its future looks grim and it is doing everything it can to turn that around.
In May this year, Mr. Norman said there were plans to shut down one hundred M&S stores. Specifically, trimming 100 stores by 2022.
In May this year, Sacha Berendji, M&S Retail, Operations and Property Director, 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.”
Mr. Norman also told shareholders that the number of M&S stores had become a “drag” on the company’s performance.
M&S stores – jobs
Steve Rowe, the M&S CEO, said that most staff in stores that have been shut down have not lost their jobs. They have been relocated, for example, to others stores.
However, Mr. Rowe warned that more redundancies are “likely.”
M&S stores – more online sales
Since the advent of the Internet, retail businesses of all sizes have had to embrace e-commerce, i.e., online shopping. As a percentage of total retail sales, online shopping has been increasing year-after-year.
M&S plans to move one-third of its total sales online. Under its plan, there will be fewer and larger homeware and clothing M&S stores.
The company says that it wants to focus on bricks and mortars stores with the best locations.
M&S focusing on the long-term
Mr. Norman said that for him, it is not the short- or medium-term that matters, but rather the long-term. He wants profitable M&S stores and healthy online sales.
Mr. Norman said:
“For me, the results in the next two years aren’t the most important thing. We are here to deliver a profitable, growing business in five years’ time,” Mr. Norman said at the annual meeting.”
“This is probably the biggest turnaround in UK retail. It’s not a quick fix.”
Following an expensive business overhaul, profits after taxation declined considerably last year (see image above).
The company has shut down warehouses in Neasden and Warrington. Its Donnington warehouse may also close down – its future is under review.