Latest tranche of closures will impact 626 employees. All staff will be offered redeployment before redundancy is considered
Marks & Spencer to shut more than 100 UK shops
British retailer Marks & Spencer said on Tuesday it would close over 100 stores in its home market by 2022, accelerating a programme to re-shape its store estate as more sales move online.
The figure includes 21 that have already closed and 14 stores newly identified for closure.
M&S first said it would reposition its store estate in 2016 to reduce the amount of space devoted to clothing and home.
Then in November last year, three months after retail veteran Archie Norman joined as chairman, the firm said it would speed up the programme. It said it had not lost as many customers as expected when stores closed, making quicker and further closures viable.
Tuesday's announcement represents a further step-up in the plan.
"Alongside relocations, conversions, downsizes and the introduction of concessions, these closures will radically reshape M&S’s clothing and home space," the firm said.
The latest tranche of closures will impact 626 employees. All staff will be offered redeployment before redundancy is considered.
"Closing stores isn’t easy but it is vital for the future of M&S," said retail director Sacha Berendji.
Marks & Spencer has bolstered its board with two new non-executive directors ahead of crunch results this month.
Katie Bickerstaffe, formerly UK and Ireland boss of electricals seller Dixons Carphone, and Pip McCrostie, who previously led accounting giant EY’s corporate finance business, will join the retailer as it battles to reverse a long-term decline in clothes sales.
Analysts expect M&S to report a 7 per cent slump in pre-tax profits to £573 million on Wednesday, raising fears it could fall out of the blue chip FTSE 100 index.
The 134-year-old M&S has been a member of the blue-chip index FTSE since its inception in 1984. Relegation would be a totemic moment for a British institution that has fallen out of fashion over the past decade.
M&S faces unrelenting competition both in clothing and food on the high street and online, while efforts to revitalise its business are being hampered by an ongoing squeeze on consumers’ spending power.
The FTSE 100 is not simply the 100 biggest companies in Britain that meet free-float and liquidity requirements. In order to avoid constant changes to the index as a result of day-to-day price volatility, companies are only demoted when they drop below 110 in the ranking.
So if M&S drops nine more places, it will be automatically relegated when FTSE Russell reconstitutes the index in its quarterly reshuffle. The next reshuffle will be announced on May 30, using closing prices from the previous day, and will take effect on June 18.
However, M&S also risks demotion if any mid-caps rise above 90th place and therefore qualify for automatic addition to the FTSE 100, meaning the smallest current blue-chip companies would be relegated to balance the numbers.