Wednesday, 8 November 2017

Marks and Spencer signals more store closures ahead in transformation plan

Marks and Spencer has signalled it is to accelerate store closures as it bids to make "significant" cost savings and "reshape" the business.
The chain said it was stepping up its transformation efforts across M&S in a bid to return the company to its former glory as the darling of UK retail, with priority placed on a digital-first approach.
Shares opened more than 4% higher on the FTSE 100 in response to the news - released alongside half-year results that showed a 371% leap in pre-tax profits to £118.3m.

However, the stock later fell back sharply - down almost 3% on the day - as investors digested the update and an admission, in a call with analysts, that the clothing market had been "difficult" during October ahead of the core Christmas season.

Conditions for food were also described as "difficult".

Underlying trading profits in the six months to 30 September were 5.3% down.

M&S reported a fall in like-for-like sales in its traditionally strong food division and also its clothing and home operation - with sales coming in 0.1% down and 0.7% lower respectively.

It said its food side had seen tougher competition and damage to profit margins from the Brexit-hit pound, with total revenue growth of 4.4% driven by 24 new food store openings.

It said its embattled clothing arm, which has dragged on its financial performance for years, had done better in the second quarter thanks to a focus on improved products at lower prices.

Nevertheless, it announced plans to shut more clothing stores in areas where they were less profitable.

SKY      News.