Marks and Spencer reported a sharp drop in annual profit, as it turned out, poor sales and high costs, the closing of the store.
Profit before tax in the retail giant fell by 62% to $ 66.8 m after a bill of £514.1 m on restructuring, which included £321m to pay for the first phase of its plan to close the store. One of the three major apparel and home stores are planned to disappear from the high street for four years and the group warned that a further £150 million pounds of costs of closure will follow.
A short guide that marks and Spencer stores are nearby?
Stores that will be closed or proposed for closure in 2018-19
Bayswater (Just Food), London
Darlington, County Durham
East Kilbride, Scotland
Fleetwood (outlet), Lancashire
Holloway road, North London
Newton Abbot (outlet), Devon
New Mersey Speke, Merseyside
Nottingham, East Midlands
Stockton, County Durham
Walsall, West Midlands
Clothing and home stores that are already closed
Covent Garden, London
Denton (outlet), greater Manchester
Durham, County Durham
Stockport, Greater Manchester
Greenock (relocation), Scotland
Newry (moving), Northern Ireland
Crewe (relocation), Cheshire
Barton area of the house is a television in the lobby store in Manchester Llandudno – satellite for the main store
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Despite the decline in net profit, Chairman Archie Norman Sich said it was a “historic day” for retailers, since the new management team developed a clear plan to revive the business. “We are looking for people to recognize that we are building a very strong team of managers who are going to give it a damn good shot,” said Norman, who is best known for the revival of the fate of Asda and ITV. “I am convinced that this is a turning point in our history.”
Executive Director, Steve Rowe, said that major structural changes affecting the retail sales transferred in the network and no-frills chains, such as primark, aldi and lidl. On Tuesday, the retailer said it would close 100 of its 300 high street stores that sell clothing, homewares and food, by 2022.
Rowe said one of the major challenges was changing the culture of the company as m&s was a “top-heavy business that was short-sighted and too‘ corporate’”. “There are too many layers, too many committees, and it is also the corporate”, – he said.
M&s expects that one-third of its clothing and homewares business to move online over the next five years. But Rowe admitted not a single website which was £150 m reconstruction four years ago, or hi-tech warehouse built in castle Donington, Leicestershire, to support its work, and now requires more investment.
“Our Internet capabilities for the best of our competitors, and our website is running too slowly,” said Rowe, recognizing that the product page takes too much time to load and the search function was not good enough. “Our fulfillment center in castle Donington struggled to cope with peak demand and some of our systems.”
M&s said clothing sales at stores open more than one year, fell in the fourth quarter of 3.4 percent, the trade was shot down by the “beast of the East snap” cold. That compared with a fall of 2.3% in the previous period. Total sales of £3.7 billion in the year to March 31 were down 1.4%, and analysts warn that the company risks losing its market leadership in primark in 2018.
A quick guide to the health of UK retail at
Stores that went bankrupt 2017-18
Toys R us: 180 shops are 3,000 employees, collapsed on 28 February. Owe 15 million pounds in VAT, in connection with the 1 March.
Workshop: 200 electronics and gadgets stores, established in 1972, also failed on 28 Feb.
Warren Evans: the manufacturer went into administration in early February.
East: a fashion brand with nearly 50 outlets, folded in January.
Juice case: history of brands, including Elizabeth Emanuel and Joe Bloggs went in January.
Multiyork: furniture chain with 50 stores went into administration in November.
Feather & black: bedroom furniture and bedding specialist with 25 points fell into administration in November.
Retailers under pressure
New look has debts of more than 1 billion pounds and has lost some of its credit insurance which protects suppliers if the seller is bankrupt. For 10 months before Christmas, sales fell by 11%, but losses hit £123m height. The company intends to close 60 stores and change its ranges of fashion, but faces struggle to win back young buyers.
House of Fraserwith the Chinese owner, Sanpower, had to stump up £ 25 million to see the store at Christmas and its debt is estimated as undesirable. The retailer is trying to reduce the size of its stores by 30% and asked landlords to cut rents.
The Debenhamsin the 178-store chain, for over 200 years, to kill one of the four leaders and with account closures to cut costs. He warned that revenues were lower than expected level of sales, profits also declined as a result of having to reduce prices to match competitors.
Photo: Tony Margiocchi / Barcroft Images/Barcroft media
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Sales in the food halls of M&s also went backwards, with underlying sales fell 0.6% in the three months to March 31 as it went to competitive stores. Food halls, Rowe said M&s should offer the best ratio of price and quality and to attract more families. To this end, it plans to develop a new type of store, it would be better to refer to this group of buyers.
Rowe, who was responsible for two years, did not rule out further closing of the store. “It’s a catch-up program. We got too many outdated stores and historically closed shops fast enough. We must ensure that we have an estate fit for the future”.
On an underlying basis, revenues decreased by 5.4% to £580.9 M. M&the shares were the best performer on the FTSE 100 Tuesday, closing up more than 5 per cent to 307p, suggesting that investors believed that management finally, familiarization with the problems of the company.
Despite the rally, the deterioration of M&s means that its place in the prestigious FTSE 100 index is in danger next week’s reshuffle.
Norman was concerned about the decline of the FTSE 250 index, a fate that befell ITV, before he took responsibility. “Right now, what you measure In the M&S] is the rate of change,” he said. “The financial results will follow.”
Russ mould, Director of investment platform AJ bell, said that maintaining the dividend will encourage investors to hang on to their shares. “Rowe admits that it’s going to be a long way, and the goal now is to deliver sustainable, profitable growth within three to five years,” he said. “Now investors have to decide that it’s too long to stay waiting at the checkout.”