The iconic British brand Marks & Spencer (M&S) has announced the closure of 30 of its UK clothing and homeware stores and the opening of 200 new Simply Food stores. The company’s chief executive, Steve Rowe, has said that the retailer also plans to close 53 stores in international markets, such as France, China, Belgium and several other European countries. This withdrawal will cost the company £150 million to £200 million and represents over a quarter of the stores it owns internationally.
M&S saw clothing sales in existing UK stores fall by 5.9 per cent at the half-year mark in 2016, with its food business seeing a drop in sales of 0.9 per cent. The falling pound sterling has further impacted on its profits due to a rise in import costs. While some analysts regard M&S’s turnaround plan as ‘humiliating’, others approve of Rowe’s strategy of concentrating forces on the UK business before turning to international expansion.
Investors reacted to M&S’s store closure plans with hesitation, with share prices initially rising before falling sharply. Matthew Hopkinson, director at the Local Data Company, commented that M&S’s store closure plans would have a “big impact for the towns where they have been the High Street anchor for many years.” Other analysts commented that M&S had fallen behind companies such as Inditex (which owns Zara) in terms of scale, speed and fashion lines, and will need to find its ‘fashion handwriting’ before it can revive profits and sales.