M&S to cut 1,200 jobs as sales slide
HIGH Street giant Marks & Spencer today revealed plans to axe more than 1,200 jobs after sales in the run-up to Christmas took a pounding.
The iconic retailer said it would close 25 small underperforming food stores with the loss of 780 jobs and was looking to shed 450 posts from its head office – 15% of the total headcount there, as part of a £175m cost saving plan.
No North West shops will close – the affected outlets are mostly in the south.
Sir Stuart Rose, chief executive said: “We are aware that the proposed changes set out above will be difficult for those members of staff impacted, but given that we expect challenging economic conditions to continue for at least the next 12 months we believe we are taking the right action to maintain the strength of our business.”
Like-for-like sales in the 13 weeks to December 27 were down 7.1%. General merchandise sales – clothing and homewares were down 8.9% and food sales 5.2%. It was M&S’ worst sales performance in nine years.
The cost of promotions, such as its £10 meal and wine offer, meant that profit margins for the full year will be lower, the company said.
In a bid to woo cash-strapped and nervous shoppers M&S began to discount prices more than a month before Christmas. It held two “One Day Christmas Spectaculars” in late November and early December to drum up trade.
Sir Stuart added: “UK retail gross margin for the full year is now expected to be around 175 basis points lower than last year as a result of increased promotional activity and our decision to invest in price for the benefit of our customers, especially in food.”
Meanwhile there was futher gloom today as Blacks Leisure said its like-for-like sales in the 18 weeks to January 3 were down 3.9%. The company said its core outdoor business had performed strongly in tough market conditions with sales down 0.5%. Its surf-related business though struggled with sales down nearly 20%.
