// M&S posts £201m loss after lockdowns affect store sales
// The retailer will reduce the number of its “full line” sites from around 250 to 180
// Some M&S stores will be transformed into “food only”
Marks & Spencer has announced plans to reduce its store estate after it plunged to a £201 million loss thanks to lockdowns and tiered restrictions.
The retailer currently has over 250 “full line” sites selling clothing and home as well as food ranges, and is set to cut this number down to around 180.
Some stores will be transformed into “food only” and others will be moved to new locations.
The retailer’s full-year loss for the year to March 27 compares to a profit of £67 million a year before.
M&S said at least 30 stores will close.
The retailer said it has already closed or relocated 59 “full line” stores, 16 food stores and eight outlets, but the effect of the pandemic means “we can move faster”.
It added that there has rarely been a better time to acquire new replacement stores on good terms.
M&S is planning 17 new or expanded “full line” stores over the next two years, including a number of former Debenhams sites, with the pipeline continuing to grow.
M&S said the overall clothing and home result for the year was “heavily impacted” by lockdowns, ongoing social distancing, steep decline in formal and occasionwear, the location of many of our stores in town and shopping centres and the priority to clear stock.
As a result, total revenue declined 31.5 per cent.
Clothing and home sales dropped 31 per cent despite online sales rising 54 per cent.
Clothing and Home recorded an operating loss before adjusting items of £129.4 million as lower sales were only partly offset by reduced operating costs.
Losses “substantially reduced” in the second half as M&S invested in its online channels to accelerate online growth to partly compensate for losses in store.
Meanwhile, food revenues grew by 1.3 per cent without including the contribution of the online delivery partnership with Ocado, which now sells M&S products and delivered a £78 million boost to its business.
M&S said its balance sheet is “stronger than expected” following the impact of the pandemic.
“In a year like no other we have delivered a resilient trading performance, thanks in no small part to the extraordinary efforts of our colleagues,” M&S chief executive Steve Rowe said.
“In addition, by going further and faster in our transformation through the Never the Same Again programme, we moved beyond fixing the basics to forge a reshaped M&S.
“With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again.
“The transformation has moved to the next phase.”