M&S announce store closures across the country

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

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

Bottom-line net profit tumbled nearly 80 per cent to 24.7 million pounds in the group's financial year to March 31, M&S said in a statement.

Britain's Marks & Spencer (MKS.L) said it needed to modernise urgently to survive after a second straight annual profit fall and a 321 million pound ($429 million) charge for a major store closure programme.

Despite the hit, shares in the retailer rose as much as 6pc in early trade, as investors were cheered that pre-tax profits with store closure costs stripped out had beaten expectations.

Chief executive Steve Rowe said: "At our half-year results in November I outlined the need for accelerated change at M&S". Actions taken under the plan include the sale and franchise of the firm's retail business in Hong Kong and Macau.

"These changes come with short term costs which are reflected in today's results".

In the final quarter of 2017, like-for-like (LFL) food sales in the United Kingdom declined 0.4% year-on-year, joining the Clothing & Home division in the ex-growth doghouse; the latter saw LFL sales decline 2.8% from a year earlier.

The retailer's troubled clothing arm saw like-for-like sales fall by 1.9 per cent in the year.

Rowe, an M&S lifer who has been CEO for two years, said M&S was now tackling the structural issues it faces at pace.

Clothing & Home revenue fell 1.4 percent to 3,741.1 million pounds for the 52 weeks to March 31, 2018, with like-for-like revenue down 1.9 percent.

Credit Suisse has predicted a 4.5% decline in pre-tax profit to £539mln in fiscal year 2018/19, driven by weak like-for-like sales but with less pressure from foreign exchange headwinds.

"The first phase of our transformation plan".

The company says the closures are vital to secure its future. It said it had not lost as many customers as expected when stores closed, making quicker and further closures viable. M&S has managed to reduce costs by at least 350 million pounds and created a platform for growth.

The British retailer has extended its closure plans as it is focusing on a minimum of a third of its sales online, as per the statement made by the high-street chain. "Teams have been established to address the supply chain issues in both main businesses, to deliver a faster, lower cost network".

Rowe said it was targeting sustainable, profitable growth in three to five years time.

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