M&S May Accelerate Plans on Store Closures This Week

By TShops from Wikimedia Commons

This week, Marks & Spencer is anticipated to accelerate the transformation plans of the company, as it reveals another drop in its profits.

According to analysts, the speed of the change at the retailer could be “dialled-up.” Analysts are predicting a decline in profit before tax amounting to 6.6 percent and adjusted items to £573m.

Last November, the company said that the effects of store closures had been positive and that the company would accelerate the rationalisation programme of its UK stores, which includes space reduction, relocations, and closures. This weekend, the Sunday Times reported that this could imply that the number of closures will rise from 60 to 100.

Some analysts at Barclays said that the interest of the City would primarily be in the forward-looking commentary from the firm.

They stated: “At the interim results last November, new Chairman Archie Norman gave the impression that the existing turnaround plan was sensible but that the pace and extent of change might need to be ‘dialled-up’ significantly.”

Analysts from Liberum meanwhile predicted that M&S will continue to see declining clothing sales, despite the gains in online shopping, as well as an “increasing pressure in the competitive food space.”

They stated: “M&S and its mid-price peers will continue to be squeezed by fast fashion, online, stronger brands and value players.”

Currently, M&S is facing the risk of a landmark demotion from the FTSE 100 following more than 30 years in the blue-chip index. The market value of the company has decreased to £4.8bn over the past few years, placing it in 102nd place. If it drops below 110 it will be relegated automatically.

Last Saturday, it was revealed that the company is courting Katie Bickerstaffe, the former chief executive of Dixons Carphone, to join its board. If successful, the move would improve the retail expertise on a board which has been slammed for a lack of experience in the sector.