Marks and Spencers are pulling away from the high street by closing another 20 stores.
The retailer has planned to close 85 of its big high street stores as the company is battling to transfer of clothing sales online. In May 2018, M&S announced it would close over 100 clothing and home stores by 2022.
M&S pre-tax profits were down by nearly 10% in the year to March 31st. Like-for-like sales were down by 2.9% for the group as a whole, like-for-like sales is an adjusted growth metric that only includes income from stores (eg high street stores) or products with similar characteristics.
Clothing and home sales were 1.6% lower, dented by the timing of Easter and poor stock availability. Total sales were 3.6% lower due to store closures.
M&S have updated investors on its transformation programme which aims M&S to become a “digital first” retailer but still have a good store presence.
Boss Steve Rowe said: “We are deep into the first phase of our transformation programme and continue to make good progress restoring the basics and fixing many of the legacy issues we face.
“As I have said, at this stage, we are judging ourselves as much by the pace of change as by the trading outcomes and change will accelerate in the year ahead.”
After more than a decade of failed attempts to restore M&S, Rowe is making an effort to stop the failure of the company by doing a massive renovation which includes revamping its clothing and food ranges as well as partnership with Ocado. M&S £750 million deal with Ocado will secure home deliveries of its food.
Senior market analyst at City Index, Fiona Cincotta, said: “The company’s uncertain future is reflected in the eye-watering deep discount that has been applied to the capital raising.
“Management is at least in the right head space by cutting the dividend and giving more priority to investment.
“The Ocado deal may well offer this increasingly irrelevant old retailer a new lease on life, but the size of the discount on the equity raising will only stoke concerns that M&S has paid too much.”
