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07/01/2009
M&S Announces Store Closures And Job Cuts
High street chain Marks and Spencer has announced plans to shut down 25 of its Simply Food stores and two of its smaller stores, after reporting one of its worst Christmas trading performances on record.
As a result of the closures, 780 jobs are set to go, with a further 450 planned to be axed at the company's head office.
M&S's Christmas trading statement revealed a drop in like-for-like sales of 7.1%, with an 8.9% decline in general merchandise - including clothing - and a 5.2% decrease in food trade.
The cost-saving scheme will also include plans to cap increases in staff's pensionable pay to 1% per year, reducing the liabilities of its final salary pension scheme.
M&S boss Sir Stuart Rose said: "We are aware that the proposed changes set out above will be difficult for those members of stuff impacted.
"But given that we expect challenging economic conditions to continue for at least the next 12 months we believe we are taking the right action to maintain the strength of our business."
However, on a more positive note, the retail giant maintained a market share in the clothing business, with a particular emphasis on the sales of lingerie and children’s clothing, while on 23 December M&S food sales sold a record of £50m.
Unions said they were shocked by the news of the 1,230 job cuts.
John Gorle, national officer of Usdaw said: "We want to talk to the company to get an understanding of the business case that has underpinned this decision.
"We are shocked at the severity of the cuts and we were not anticipating store closures. Our members will now be extremely worried."
Marks and Spencer employs around 70,000 staff in the UK and 75,000 in total, and has 661 stores throughout the UK, including Simply Food and franchise outlets.
(JM/KMcA)
As a result of the closures, 780 jobs are set to go, with a further 450 planned to be axed at the company's head office.
M&S's Christmas trading statement revealed a drop in like-for-like sales of 7.1%, with an 8.9% decline in general merchandise - including clothing - and a 5.2% decrease in food trade.
The cost-saving scheme will also include plans to cap increases in staff's pensionable pay to 1% per year, reducing the liabilities of its final salary pension scheme.
M&S boss Sir Stuart Rose said: "We are aware that the proposed changes set out above will be difficult for those members of stuff impacted.
"But given that we expect challenging economic conditions to continue for at least the next 12 months we believe we are taking the right action to maintain the strength of our business."
However, on a more positive note, the retail giant maintained a market share in the clothing business, with a particular emphasis on the sales of lingerie and children’s clothing, while on 23 December M&S food sales sold a record of £50m.
Unions said they were shocked by the news of the 1,230 job cuts.
John Gorle, national officer of Usdaw said: "We want to talk to the company to get an understanding of the business case that has underpinned this decision.
"We are shocked at the severity of the cuts and we were not anticipating store closures. Our members will now be extremely worried."
Marks and Spencer employs around 70,000 staff in the UK and 75,000 in total, and has 661 stores throughout the UK, including Simply Food and franchise outlets.
(JM/KMcA)
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