More jobs under threat as retailers fight against high street slump

More trouble on the high street

A retailer with three stores in the North West has become the latest victim of the slump on the High Street.

Luggage and handbag specialist Bags Ect has gone into liquidation with the loss of 350 jobs.

The news of more store closures emerged on the same day that it was announced Tesco Direct is being axed by the supermarket giant with the loss of hundreds of jobs.

And this morning Marks & Spencer has announced that its profits had plunged by 62%.

The high street giant has been hit by big charge to cover the cost of closing stores.

The retailer’s pre-tax profits fell by 62% to £66.8m from £176.4m in 2017.

Profits were hit by a one-off charge of £321m to cover the closure of stores across the UK.

The retailer says the plan to close 100 shops is vital to protect its long term future.

Two North West stores are in the latest hit-list of closures announced by Marks & Spencer.

So far 21 have already been closed, and yesterday the group announced 14 more set for closure.

They include an outlet store in Fleetwood, which will shut by the end of July this year, and its New Mersey Shopping Centre store in Speke, Merseyside.

Steve Rowe, Marks & Spencer chief executive, said: “At our half year results in November I outlined the need for accelerated change at M&S.

“The first phase of our transformation plan, restoring the basics, is now well under way and the actions taken have increased the velocity of change running through our business. These changes come with short term costs which are reflected in today’s results.

“There are a number of structural issues to address and we are taking steps towards fixing these. The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business.

“This is vital as we start to leverage the strength of the M&S brand and values across a family of businesses to deliver sustainable, profitable growth in three to five years.”

Bags Ect, which also traded as Domo, had a chain of 58 shops including branches in the Arndale Centre in Manchester city centre and in Altrincham and Wigan.

The company was forced to call in liquidators from restructuring and insolvency firm CVR Global after experiencing financial difficulties.

Elias Paourou, partner at CVR Global said: “Over recent years the retailer suffered with a number of stores in its portfolio that were loss-making as consumers congregated to stronger, premium and central shopping centres, resulting in its stores that were located in suburban shopping centres losing significant traffic flow.

“In addition, the shift in consumer behaviour towards online platforms also provided a detrimental effect on overall sales via stores.

“Consequently the company was not able to continue trading, resulting in liquidation and the staff being made redundant.”

Tesco announced it is shutting down its clothing and homewares website with the loss of 500 jobs.

The news was broken to staff on Tuesday afternoon that the website it launched in 2006 was being axed.

Tesco boss Charles Wilson said: “This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future.

“We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform.”

Tesco said the website, which will cease trading on 9 July, had struggled with the high cost of fulfilling orders and online marketing.

The supermarket said the move would mean the closure of a distribution centre in Milton Keynes.
Other retailers who have been forced into drastic measures to cope with the slump in spending have included Mothercare and Marks & Spencer.

Both have announced store closures in a bid to stay afloat as shoppers have cut back on spending and moved online.

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