M&S to close 60 clothing stores as it shifts focus to food

M&S Cheshire Oaks Store

M&S has announced that it will close 60 clothing stores as it places a greater focus on food instead of fashion.

M&S has announced that it will close 60 clothing stores as it places a greater focus on food instead of fashion.

The retail giant, which has been on UK high streets for years, is, like many UK supermarket chains, facing tough times against more affordable competitors, such as Primark and H&M. In April, Steve Rowe replaced Marc Bolland as company CEO, with the aim of stopping a five-year decline in its clothing sales.

Now, Rowe has announced that around 60 Clothing & Home stores will close over the coming years. This is part of a five-year plan developed following a strategic review in May, with the aim to create “a simpler business with customers at its heart”, “taking action to start to recover our Clothing & Home business and continue to grow in Food”.

“We have now completed a forensic review of our estate both in the UK and in our International markets,” said Rowe in the company’s announcement to the City. “Over the next five years we will transform our UK estate with c.60 fewer Clothing & Home stores, whilst continuing to increase the number of our Simply Food stores. In the future, we will have more inspiring stores in places where customers want to shop that complement our growing digital offer.”

While around a quarter of its floorspace will be affected by the changes, the firm continues to expand its Food arm. Indeed, M&S’ Food to Order – entertaining and gifting products – continued to perform well with sales up double digits in the last year, boosted by the opening of 21 new stores. The performance of new Simply Food stores was ahead of expectations with stores opened in the past year exceeding sales forecasts by 17 per cent.

“We will continue with our previously announced Simply Food store opening plans which will see us opening over 200 new stores by the end of 2018/19,” said Rowe. “This will result in a net reduction of c.10% of Clothing & Home space with 60 fewer full line stores. These changes will include a combination of approximately 30 full line closures, and downsizing or replacing around 45 full line stores to Simply Food stores. We will relocate some of our other stores and also open some new full line stores in underserved areas.”

Internationally, the company will cease trading in 10 markets where it is making a loss.

“In 2015/16 our owned International business delivered a loss of £31.5m and in total our International operating profits were down 39.6 per cent to £55.8m,” said Rowe.

The company’s international business consists of two parts: an owned business that is loss making in a number of markets and a profitable franchise business, which made a profit of £87.3m last year. M&S will therefore focus on growing joint ventures and franchise partnerships; the firm has 267 franchise stores in 34 markets, as well as established joint ventures in Greece and India.

“Working together with our partners here, we will leverage their scale, infrastructure and local expertise. We will also continue to develop our franchised Food business in France where there is demand for our quality, innovative products at convenient locations,” said Rowe, although previous reports revealed that the firm would be closing its flagship department store in Paris.

“We will continue to operate owned businesses in the Republic of Ireland, Hong Kong and Czech Republic, which are profitable with strong brand awareness, established store estates and loyal customers.”