M&S clothing sales decline 5.9 percent in H1 FY16

Total home & clothing like-for-like sales at M&S decline 5.9 percent in the first half of this financial year. Total UK sales were up 0.1 percent while like-for-like sales were down 3 percent. Pre-tax profit was down 88 percent to 25.1 million pounds (31.2 million dollars). International sales decreased by 1 percent. With the company’s clothing business suffering in the current scenario, the company has announced that it plans to shut almost 60 clothing & home stores in the UK to drive growth.

“In May, we laid out a number of questions which we would answer as part of our strategic review. We committed to creating a simpler business with customers at its heart, and taking action to start to recover our clothing & home business and continue to grow in food,” said Steve Rowe, M&S CEO.

Plans to close 60 stores in the UK

In the UK, the company continues to expand its Simply Food business with over 200 new stores by the end of 2018/19, while improving the quality and productivity of our clothing & home space by trading from fewer, better locations. While the company will continue with its previously announced Simply Food store opening plans with over 200 new stores by the end of 2018/19 along with existing 304 ‘full line’ stores selling both clothing & home and food. Its programme will touch more than 100 stores, accounting for 25 percent of the space. This will result in a net reduction of 10 percent of clothing & home space with 60 fewer full line stores. These changes will include a combination of approximately 30 full line closures, and downsizing or replacing around 45 full line stores to Simply Food stores.

In 2015/16, the company’s international business delivered a loss of 31.5 million pounds (39.1 million dollars) and international operating profits were down 39.6 percent to 55.8 million pounds (69.3 million dollars), so the company has undertaken a comprehensive review of its international business. In the future, the company proposes to operate with fewer wholly-owned markets and have a greater focus on its established joint ventures and franchise partnerships. M&S has 267 franchise stores in 34 markets, as well as a joint ventures in Greece and India.

While it will continue to operate owned businesses in the Republic of Ireland, Hong Kong and Czech Republic, the company plans to close all of our 53 wholly-owned stores in the ten markets, including ten in China and seven in France, as well as all of our stores in Belgium, Estonia, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia.

Picture:M&S