Marks & Spencer will be shutting down several operations over the next few years. (Photo : Getty Images)
Marks & Spencer has announced that it will shut down 30 clothing and homeware stores in the U.K. and convert other shops into food stores as profits turn sour in its latest earnings report.
M&S chief executive Steve Rowe also said that that they will stop operations in loss-making stores in 10 international markets, which include China and France.
Rowe stressed that the company will continue its relationship with its franchise partners.
"These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multichannel and focused on delivering a sustainable return," Rowe said in an official statement.
M&S will likewise close 53 stores outside the U.K and start talks with about 2,100 affected workers.
"M&S have been trying to dig their general-merchandise business out of trouble for several years, but for now it seems that the time has come to stop digging," Phil Dorrell, a partner at consultant Retail Remedy, was quoted as saying in a China Daily interview.
"By closing stores and cutting jobs without an accompanying announcement on a new strategy, M&S [is] giving in," Dorrell added.
Overall, the planned shutdown will result to 60 closed stores over the next five years.
By keeping a lid on its clothing & home stores, M&S plans to redirect focus to its food shops. The company intends to open more food outlets as this segment outperforms the market.
The performance of M&S' new Simply Food stores beat sales projections by 17 percent.
The retailer intends to expand this business by opening 200 new stores through 2019.
Investors, however, remain wary about the firm's planned store closures in an attempt to cut costs.
"Cost-cutting will help to support earnings forecasts but this will only take M&S so far. To truly revive profits the company must get clothing and home right, and it is currently hard to argue that M&S has really found its fashion handwriting," Russ Mould, investment director at AJ Bell, said in an interview with the BBC.
