Marks & Spencer (M&S) has posted annual losses worth just over £200 million for the full year to April 2021, with its operations having been hindered very significantly by the Covid pandemic.
Plans are in place for the business to reduce the scale of its store estate from just over 250 down to around 180 with the aim being to create a better optimised operation.
The store closure process is described by M&S as an “accelerated rotation of the full line store estate” and is understood to be costing the business millions of pounds to undertake.
However, reducing the number of M&S stores across the UK is viewed as operationally necessary, particularly with the pandemic having added so much to the financial pressures that retailers have been under in recent quarters.
“The drag on performance of the legacy estate has been exacerbated by Covid bringing forward the decline of some locations but also creating opportunities for rotation,” a statement from M&S explained.
More generally, M&S has said that the pandemic has accelerated some trends and opened up opportunities for a proactive reorientation for some aspects of its business.
In relation to its clothing business, M&S is now planning to focus more on growth areas including “new office smart wear” and less on tailored or formal wear.
Meanwhile, some of its stores are expected to be adjusted from being full-line outlets to shops focussed solely on selling M&S food and drink offerings.
Inevitably perhaps, given the pandemic and the extensive lockdowns it made necessary, M&S’ in-store clothing and home sales were down sharply in the year to April 2021 but its online sales climbed by 54 per cent during the same period.
Sales recorded in the weeks after non-essential retailers could reopen recently were up on comparable figures for 2019 but it is unclear yet whether demand levels seen in April can be maintained going forward.
A total of £306 million in government support was taken on by M&S in its most recent full year, with that support including £175 million in business rates relief and £131 million to cover the costs of wages for temporarily furloughed employees across its workforce.