Britain's M&S to close stores as profits fall

[LONDON] Britain's Marks & Spencer said on Tuesday it would shut stores at home and abroad, with its new chief executive seeking to cut costs as part of a revival plan.

The clothing and food retailer said it would reposition about 25 per cent of its UK clothing and home space.

It will close about 30 full line UK stores and change around 45 stores to only sell food. Other stores would be re-located.

The cost of the programme would be 50 million pounds (US$62 million) for the next three years, rising to about 100 million pounds in years four and five.

M&S also plans to focus its international business on a franchise model, exiting its loss-making owned business across 10 markets, at a cost of 150-200 million pounds over the coming 12 month period, thereby eliminating annual losses of 45 million pounds.

M&S also reported an 18.6 per cent fall in underlying pretax profit for its first half to Oct 1 of 231.1 million pounds along with a 2.9 per cent fall in second-quarter underlying clothing sales. Like-for-like food sales were down 0.9 per cent.

REUTERS