M&S could close more stores as five-year turnaround plan continues
M&S’s plan to close 110 of its stores might not be the end of the story with the retailer’s giant store estate possibly due for further closures. The firm’s CEO, Steve Rowe, hinted at that when he said at its annual general meeting (AGM) on Tuesday that the current plans are “not finite”.
The shareholder audience at the AGM was also told that the giant portfolio of legacy stores the company has is “holding it back” as it works to turn around its fortunes. And chairman Archie Norman added that the company, which has been in turnaround mode for virtually two decades, is reaping the unwanted reward of “not shutting stores 10 or 20 years ago.”
The company is currently planning to close 85 full-line stores (those that sell its complete product offer) and around 25 Simply Food shops.
Norman said the restructuring plan would help to create stability at M&S as it refocuses resources on more promising areas such as online and on doubling the size of its food business via its new delivery partnership with Ocado.
Meanwhile Rowe said that the retailer is still seeing “wobbles” in its business that are holding back its fashion operations. For instance, it sold out of popular jeans earlier this year and so was unable to meet ongoing demand with Rowe calling it “some of the worst availability I'd seen in 30 years.”
He also said that the company should be able to meet its £350 million savings targets by closing “old-fashioned stores,” but he didn't give any more details about when or if further decisions would be taken on additional store closures.
Norman did say that store staff will be pulled into the conversation more as the turnaround continues. “Somewhere along the line, the organisation we inherited became slow, unaccountable and lost the voice of the stores. If we hear the voice of the stores, we will grow,” he added.
While the mood of the meeting was broadly supportive with shareholders approving of the turnaround plan, in response to one who complained about a lower share price and dividend decline, Norman said: “This is a five-year programme and the most important thing is to get on with the job and hopefully in years to come we will get back to paying an increased dividend.”
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