UK department store chain Marks & Spencer is about to announce further store closures along with reduced profits amid worsening high-street trading conditions.
Last year, the company announced the closure of 30 stores, but The Guardian newspaper reports a plan has been devised by CEO Steve Rowe and incoming chairman Archie Norman for a bolder store rationalisation plan.
The company is struggling to regain market share in its apparel division, which is almost exclusively own-label and has failed to keep pace with design and innovation of branded rivals.
Analysts are tipping the company to announce a further 10 per cent decline in profits for the six months to September 30, to around £201 million. That’s a far cry from the £1 billion full-year profit back in 2008.
In place of apparel, the company is redirecting its focus onto its successful food category, with some of the full-line stores to be converted into food-only stores.
Last year, the company exited the China market and this year began preparations to sell its Hong Kong business to Al-Futtaim under a franchise agreement.
The Guardian suggested that if M&S decides to close more stores it will deal a blow to the towns involved, where the retailer is often the main destination store, especially following the demise of BHS.
“But with more purchases made online, stores in smaller or less attractive town centres and shopping centres are finding life difficult especially amid rising costs for retailers.”