Marks & Spencer has reported a 62.1% fall in annual pre-tax profit to £66.8 million, just a day after announcing dozens of store closures.
The figure, which compares to £176.4 million last year, was dragged down by £321.1 million in costs linked to its decision to shut shops.
The firm said on Tuesday it would shut 100 branches in the next five years and significantly scale back its UK expansion.
And in its stock market update on Wednesday, M&S said its troubled clothing arm, which includes womenswear, saw like-for-like sales fall by 1.9% in the year. Comparable food sales were down 0.3%.
The company said store closures were part of an acceleration of its “transformation programme”, and will take place before 2022.
A press statement said staff affected stores would be redeployed to other stores, before redundancy is considered.
M&S has faced tough competition from online competitors amid flagging sales of its clothing, especially among young consumers.
The London-based firm announced 14 stores are earmarked for closure before the end of 2019, potentially affecting hundreds of staff.
The stores immediately impacted are:
Closing by July 2018
- Fleetwood Outlet
- Newton Abbot Outlet
Closing by early 2019 (replaced by nearby food stores)
- Clacton-on-Sea, Essex
- Holloway Road, London
Uncertain, before end of 2019
- East Kilbride,
- New Mersey Speke,
The stores proposed for closure will now enter a period of consultation with all 626 affected employees, the company said.
Tuesday’s announcement follows confirmation last year that 30 stores would close.
Sacha Berendji, retail, operations and property Director at Marks & Spencer, said: “We are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans.
“Closing stores isn’t easy but it is vital for the future of M&S.
“Where we have closed stores, we are seeing an encouraging number of customers moving to nearby stores and enjoying shopping with us in a better environment, which is why we’re continuing to transform our estate with pace.”
The move comes after high street giant New Look announced similar plans to cull stores, and as retailers struggle to keep physical shops open amid a “perfect storm” of pressures, including a weakened pound, inflation, rent increases and reduced footfall.
NOTE: This article was updated on Wednesday 23 May to include details of Marks and Spencer’s financial results.