Marks & Spencer has hinted that there could be even more job losses and store closures as it powers on with its radical turnaround scheme.
Speaking at the retail bellwether’s AGM yesterday, chairman Archie Norman said the size of the M&S store portfolio had become a “drag” on its performance.
The department store and food retailer announced in May that it plans to close 100 stores by 2022, putting hundreds of jobs at risk.
But Norman told shareholders this week that most of the 100 stores would be shut within the next two years, as part of the retailer’s five-year turnaround scheme.
“I can’t tell you it won’t be the last,” he said.
M&S is also planning to cut its costs by £350 million by 2021, also part of the restructuring laid out in the turnaround scheme.
M&S chief executive Steve Rowe said that “there are likely to be more redundancies” as a result.
However, he stressed that 86 per cent of the staff working in the stores closed so far have been successfully relocated within the business.
Norman said: “For me the results in the next two years aren’t the most important thing.
“We are here to deliver a profitable, growing business in five years’ time.
“This is probably the biggest turnaround in UK retail.”
Normal also told the AGM that he wanted to present the “unvarnished truth” about the company’s prospects.
He highlighted various issues within the business, namely placing blame on organisational failures for M&S’s problems.
He added that the retailer was up against stiff competition from online retailers and discount retailers such as Aldi, Lidl and Primark.
Norman was parachuted into the chairman role in November last year to help with the M&S turnaround scheme, which was launched the year prior.
Apart from store closures and a deceleration of its Simple Food expansion, the retailer has so far improved its IT systems and shut down some warehouses in its distribution network.
M&S recorded a 62.1 per cent plunge in pre-tax profit to £66.8 million in the year to March 31, primarily due to £321.1 million in costs linked to store closures.