M&S has refused to deny the reports, saying it doesn’t comment on rumour and speculation. But it comes just days before chief executive Steve Rowe is due to update investors on trading.
He is likely to reveal another difficult quarter for the department store’s beleaguered clothing arm and was already expected to announce the start of closures among Marks & Spencer’s 450 overseas stores.
But new reports suggest dozens of stores in the UK may also face closure, with M&S stopping clothing sales in others and concentrating on its more successful food and drink business. The success of its high-end supermarket business was underlined earlier this year when it opened its new 10,000 sq ft foodhall on Cannock’s Orbital retail park.
But the latest moves, if true, would put ‘full-line’ stores like its branches in Wolverhampton, Walsall, Merry Hill, Kidderminster and Stafford in the firing line, among 300 others across the UK that sell clothing, homewares and food.
M&S already has more than 220 Simply Food stores, with a further 350 M&S food shops owned by franchisees. It has already announced plans for another 200 Simply Food stores by 2019.
Marks’ big problem is its general merchandising division, which includes clothing, where sales have continued to fall. Mr Rowe, who took over from Dutchman Marc Bolland in April, is undertaking a wide-ranging overhaul of the business as he attempts to turn the retail giant around.
A month into his tenure, Mr Rowe swung the axe on 525 jobs at the retailer’s head office in a bid to cut costs. He later embarked on a major shake-up of staff pay in an effort to mitigate the impact of the national living wage.
He is due to update the City on his plans on Tuesday.
Kate Calvert, analyst at Investec, said: “Steve Rowe will give part two of his strategic update on November 8. Having set his first priority as reviving clothing sales in May, Steve Rowe is due to come back to the ideal UK store estate in a multi-channel world, international operations, and capital returns.
“We believe the market already anticipates action in all these areas and is likely to focus on weak trading and profit decline,” she said.
Investec is pencilling in a 23 per cent fall in half-year underlying pre-tax profits to £218 million.
Ms Calvert described Marks & Spencer’s owned businesses in Ireland, Czech Republic and Greece in particular as the ‘main drag’ on the international business.
[Source:-Exoress & Star]
