M&S’s partnership with Ocado proved to be a success as its food sales contributed
Marks and Spencer (LON:MKS) confirmed plans to shut down a further 30 stores over the next decade as part of a plan to turn around the businesses’ fortunes.
M&S has previously closed or relocated 59 key locations, in addition to slashing 7,000 jobs across the business.
The company was badly impacted by the pandemic last year as it reported significant losses.
M&S’s partnership with Ocado proved to be a success as its food sales contributed towards a “resilient performance” during a testing year.
The FTSE 250 company recorder a loss before tax of £201.2m during the year to 27 March, a swing from a £67.2m profit the year before.
M&S says it has 254 “full-line stores”, selling clothes, homewares and food. However, it says they are all in decline and future investment is unsustainable.
“Marks & Spencer’s full year results are easy to interpret. The retailer smashed it with food sales, but clothing was a flop as the working from home trend caused a slump in suit sales and the nation no doubt decided it didn’t need to buy any of its pastel-coloured jumpers,” says Russ Mould, investment director at AJ Bell.
“The company seems to be hoping that 2021 will be a turning point (just like each of the previous years and their turning points, given its eternal turnaround programme).”
“If this new push with clothes is unsuccessful, it will no doubt raise the question once again as to whether Marks & Spencer would be better off focusing purely on food. It wouldn’t be easy to sell the clothing and homewares arm because of the shared floor space with food in so many stores, plus there can’t be many businesses who would want to take on additional property. Therefore, it has to make the new clothing strategy work.”
