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M&S restructuring taking effect – but appetite for food stores shrinks

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Written by: Andrew Merrell | Posted 08 November 2017 9:25

M&S restructuring taking effect – but appetite for food stores shrinks

Restructuring appears to be turning around the fortunes of High Street legend M&S but the firm still reported a 5.3 per cent fall in profits - enough to change its mind about opening so many food stores.

As it made the announcement it also revealed the departure of chief financial officer Helen Weir, who had revealed her plans to the British giant to pursue what is being called a “plural career”.

Looking on the bright side the High Street legend was able to report group revenue of £5,125.6million in the six months to September 20, an increase of 2.5 per cent on the same time last year.

In other words, revenue has stopped falling, partly due to the firm’s decisions to scrap two clearance sales events and cut back on promotions. Tougher decisions and investment have been taken elsewhere.

“Our overall priority is making our shopping experience special so we have invested in store service, adding over 3,000 colleagues. In addition, we have simplified our head office structure with a reduction of over 500 roles,” said the trading statement.

International profits trebled to £60.30million.

But it is the high end food business in which it now has least confidence, an area which had previously propped up growth even when its clothing business was stalling.

This is despite food revenue being up 4.4 per cent, driven, said the company, by new stores.

 “We have made good progress in remedying the immediate and burning issues at M&S I outlined last year,” said Steve Rowe, chief executive.

“In Clothing & Home early results are encouraging and in International we now have a profitable and robust business.

“We recognise now that we face stronger headwinds in Food which will be addressed in the year ahead.

“The business still has many structural issues to tackle as we embark on the next five years of our transformation, in the context of a very challenging retail and consumer environment. Today we are accelerating our plans to build a business with sustainable, profitable growth, making M&S special again.”

Just last year the British legend announced plans to add 200 new food stores by the end of 2019.

This was while it also revealed plans to close 300 clothing stores.

M&S has outlets in Gloucester at Eastgate Shopping Centre, the Quays and at the BP garage on Barnwood Road and in Cheltenham on the High Street, at the Golden Valley Retail Park, Kingsditch Retail Park and Prestbury Road BP garage.

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