Marks & Spencer says it will close 32 more stores, blaming Brexit, the war in Ukraine and local and national government policies for hitting profits.
The retail chain said many stores have “lost impetus” and admitted it was facing “increasing cost pressures and consumer uncertainty”.
The retailer plans to change the focus of large aspects of its business, shifting away from multi-floor town centre buildings to instead focus on edge of town sites with better access and car parking.
M&S said it plans to open 15 new full-line stores and 40 food outlets over the next three years, but the move also means that more stores will close. The retailer is yet to confirm which stores could be affected.
Why is Marks & Spencer making this change?
A decision to fully exit Russia after pausing deliveries due to the war in Ukraine will cost the retailer £31m, and new EU tariffs and border costs relating to Brexit cost £29.6m in profits and £15m in lost trade, according to the Guardian.
Marks & Spencer is planning to reduce space devoted to clothing and homewares further, as sales were down by almost a quarter compared to four years ago, yet space had dropped by 10%.
The retailer will raise £200m by selling old stores, as it said sales in city centres were down 14%, and in high streets, sales were down 8% on pre-pandemic levels.
The stores in travel hubs, such as airports and stations, were down 39%, largely due to pandemic restrictions and people making the shift towards working from home, while in retail parks, sales rose by 22%.
What has Marks & Spencer said?
In a statement, M&S said: “We recognise that in an omni-channel world, ease of shopping and fast access is critical to competitiveness, and in many cases we believe the town centre locations have lost impetus as a result of failed local authority or government policy.
“As a result, a high proportion, but not all, of our relocations are to the edge of town.”
Meanwhile, sales at its joint venture with Ocado were down as shoppers returned to buying groceries in stores, as sales declined by 8% in the quarter to 25 April.
Ocado said it has benefitted from a rise in customer numbers, which have grown 12% in the year, but it highlighted that “the rate of growth has slowed as consumers respond to short-term discounts and promotions”, spurred on by the cost-of-living crisis.