Daily Management Review

Marks & Spencer closes shops after loss-making year


UK retailer Marks & Spencer (M&S) reported its fiscal year 2020/21, which ended in early April. It posted a loss of £201.2m ($285.1m) for the period, compared with a profit of £27.4m a year earlier.

Revenue for the year as a whole fell 11.9% to £9.2 billion ($13 billion), with revenue from the UK apparel and homewares division falling 31.5%. Revenues at its largest food division, now down only 0.3%.

M&S has also announced its intention to continue restructuring and reducing the number of shops - 30 UK shops will close over the next ten years, with over a hundred more shops to be either consolidated or retain food-only sales. In total, the company is going to reduce the number of full-service shops (selling both clothing, homewares and food) in the UK from the current 254 to 180. Last year, M&S already closed more than 80 shops and cut 7,000 jobs.

The company's difficulties began before the pandemic, and it was already facing a decline in demand for its products. Chris Daly, CEO of the Chartered Institute of Marketing, says M&S's poor performance comes as no surprise: "This champion of offline retailing, already disadvantaged by a limited online offer before the pandemic, must quickly adapt to the impact of COVID." Online sales of M&S were up 53.9% last year. The company's overseas shops also performed better than those in the UK - they ended the year with a profit that fell 59.3% to £44.1m ($62.5m).

source: bbc.com