UK: Retailer Marks & Spencer has announced increased commitment to its food business after a a shake-up of its estate and closures affecting its clothing business.
In plans announced today, M&S says it will transform its UK estate over the next five years with around 60 fewer Clothing & Home stores, whilst continuing to increase the number of its Simply Food stores.
Poor performance in its clothing business saw pre-tax profits fall 18.6% to £231.3m in the six months to October 1. Marks & Spencer’s food business, meanwhile, continues to outperform the market. With total food sales increasing by 4%, industry figures suggest its market share increased by 20 basis points in the most recent quarter.
M&S said it would continue with its previously announced plans to open over 200 new Simply Food stores by the end of 2018/19. The changes announced today will also include downsizing or replacing around 45 full line stores to Simply Food stores.
“We opened 21 net new stores as we continue to expand the reach of our food offer,” M&S CEO Steve Rowe revealed. “The performance of new Simply Food stores was ahead of expectations with stores opened in the past year exceeding sales forecasts by 17%.”
Although also proposing to close all of its 53 wholly-owned stores in ten loss-making markets, including China, France, Belgium, Estonia, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia, its food business in France will continue.
Steve Rowe said that its franchised food business in France would continue “where there is demand for our quality, innovative products at convenient locations”.
“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,” he added.