Marks & Spencer has reported a fall in its annual profits as it revealed a deterioration in clothing sales and huge store closure costs.
Pre-tax profits dropped by a huge 62% to £66.8m after a £514.1m bill for restructuring costs. One in three of its core clothing and home stores is scheduled to disappear from the high street within four years.
M&S chief executive, Steve Rowe, said major structural changes were having an impact on the retailer as sales transferred to the internet. On Tuesday the retailer said it would close 100 of its 300 high street stores, which sell clothing, homewares and food, by 2022.
“These [developments], together with a challenging UK consumer market, mean that we have to modernise our business to ensure we are competitive and reignite our culture,” Rowe said. “Accelerated change is the only option.”
M&S said clothing sales in stores that have been open more than one year dropped by 3.4% in the first three months of 2018. That compared with a decline of 2.3% in the previous period. Sales in its food halls are also going backwards, posting a worse than expected decline of 0.6% in the fourth quarter.
