Marks & Spencer(M&S) is expediting the closure of more than a 25 percent of its larger stores.

In three years, rather than five, these stores sold clothing and homewares.

This is in addition to the opening of over 100 new Simply Food stores.

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As a result of “significant cost headwinds,” the retailer informed investors on Wednesday, October 12.

That it would accelerate its store right sizing plans.

Staff costs were up 7 percent this year, while energy costs were £40 million higher than expected.

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It stated that without assistance, it would face a £100 million increase in energy costs next year.

The retailer intends to close 67 “lower productivity full line stores,” bringing the total number of stores selling M&S’s full range of food, clothing, and homewares to just 180.

It will, however, expand its “high productivity” Simply Food stores by 104 locations.

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The increase coincides with an increase in M&S’s online clothing and home sales.

As it cuts clothing and home space by 20 percent, the retailer hopes to achieve 50 percent of sales in the categories through ecommerce.

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Despite a 5 percent reduction in clothing and home space, sales had increased 35 percent over pre-Covid levels.

Meanwhile, the 29 percent increase in food space had resulted in a 75 percent growth in sales.

It also wants to improve its margins, with a goal of reaching 4 percent in food and 10 percent in clothing and home.

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International is another expansion area for M&S, which plans to double operating profit in this division by 2028.

M&S’s new CEO, Stuart Machin, declared that “cash is king,” as the retailer aims to save £400 million in structural costs by 2028.

The retailer intends to save £150 million over the next 12 months, with another £150 million to be found over the next 24 months.

Source: BBC

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