LONDON (BLOOMBERG) - Marks & Spencer Group announced plans to close 60 stores in Britain and retreat from 10 countries as chief executive officer Steve Rowe unwinds the expansion efforts of his predecessor in an effort to reverse years of underperformance.
The domestic closures will take place over five years and reduce the amount of space devoted to clothing and home wares by 10 per cent, the retailer said in a statement on Tuesday, also cutting its margin outlook for the year. M&S will also shut 53 stores outside Britain - namely in China, France, Estonia, Belgium, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia, according to ITV.com. The retailer will also start consultations with 2,100 workers.
When contacted, Robinsons Group confirmed Singapore was not among the 10 countries, and that no Marks and Spencer stores, as well as Robinsons outlets, which the group manages in the Republic will be closing.
“Customers can continue to shop at our 10 stores in Singapore," said Mr James Harvey, Head of International Franchise at Marks & Spencer. "We will focus on improving our customers’ experience and driving profitability."
Mr Rowe said in the statement: "These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns."
M&S veteran Mr Rowe replaced Marc Bolland as CEO this year and is taking immediate action to address the British fashion retailer's struggles at home and abroad. Domestic clothing sales have been in near constant decline for five years as shoppers defect to nimbler rivals such as Hennes & Mauritz and Zara. International earnings have been weighed down by weak demand in Europe and turbulent economic conditions in Asia and the Middle East.
M&S expects gross margins in its clothing and home business to expand by between zero and 0.5 percentage points for the year, cutting the forecast due to the weakness of sterling. The retailer had previously predicted an expansion of between 0.5 and 1 percentage point.
Underlying group pretax profit fell 19 per cent to £231.3 million (S$399.5 million) in the first half. That compared with the £218 million estimate of 18 analysts surveyed by Bloomberg.