Marks & Spencer tackles structural issues as profits slump

M&S profits plunge 62pc amid sweeping store closure plans

M&S store closure costs result in 62% annual profit plunge

Back in 2016, M&S embarked upon a five-year overhaul of its United Kingdom stores amid fierce competition from supermarkets and budget garment chain Primark - and particularly from online giants like Amazon.

Some closures are occurring to coincide with the opening of nearby M&S food stores, the retailer noted.

It comes a day after it announced it was closing 100 stores by 2022, accelerating a reorganisation that it says is "vital" for the retailer's future.

The high-street chain, which has already shut 21 branches as part of the overhaul, yesterday expanded its closure plans as it aims to shift at least a third of sales online.

Britain's Marks & Spencer on Wednesday reported a 5.4 percent fall in full-year profit, a second straight decline, hurt by a weakening in the food profit margin.

M&S profits plunge 62pc amid sweeping store closure plans

Rowe's plan is the latest in a series of efforts to update the 134-year-old retailer, which has struggled to compete with the rise of cheap fast fashion chains and low-priced food retailers. At the end of 2017/18 M&S had 1,035 stores in the United Kingdom, with 300 Clothing, Home and Food, 696 Food-only and 39 Outlet stores. Global sales fell 7.9 percent to 1,087.2 million pounds during the year while worldwide profit before adjusting items more than doubled to 135.2 million pounds.

"There are a number of structural issues to address and we are taking steps towards fixing these", added Rowe.

"That's reflected in the fact M&S is one of the most shorted stocks in the market, with 12% of the company's shares out on loan to those who have bet against it".

"The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business". M&S highlighted the continued migration of shopping for clothing and home online, together with the development of global competition and discounters as threats to its business and market position, which led to the decision to accelerate its transformation plan to modernise its business.

Marks & Spencer has become the latest and most high-profile high street name to announce a round of store closures, pilling further woe on the beleaguered retail sector.

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