18th Aug 2020 08:19
(Alliance News) -Â Marks & Spencer Group PLC on Tuesday said it plans to cut around 7,000 jobs as part of a "streamlining" process.
The announcement came as the food, clothing and home retailer said it performed ahead of its possible Covid-19 scenario in the year-to-date.
In 13 weeks to August 8, Food sales increased 2.5% while like-for-like sales, excluding the impact of the closure of hospitality and travel franchise units, were up 11%. M&S added that its agreement with Ocado Retail, part of Ocado Group PLC, is on track for September, and it is making good progress in its Vangarde supply chain effectiveness programme.
In Clothing & Home, sales were down 39% in the 13-week period.
In the 8 weeks since stores re-opened, sales have been down 30%, with trends "steadily improving". In this 8-week period, store sales were down 48% and online up 39%.
"The performance of store sales has varied widely across the estate with some of the newer out of town stores trading close to last year's level of sales overall in recent weeks but legacy town centre stores and some shopping centres still heavily impacted by social distancing and reduced footfall. Furthermore, with the closure of many workplaces and lack of social gatherings, the clothing sales mix has seen a substantial shift from office dressing and formal wear into casual clothing and leisure wear," M&S said.
International sales have performed ahead of the retailer's Covid-19 scenario, but it is "too early to know" if this will be sustained with trading in a number of markets "volatile".
Group revenue for the 13-week period was down 13%, with the 8-week revenue decline more moderate at 10%.
Chief Executive Steve Rowe said: "In May we outlined our plans to learn from the crisis, accelerate our transformation and deliver a stronger, more agile business in a world in which some customer habits were changed forever. Three months on and our Never the Same Again programme is progressing; albeit the outlook is uncertain and we remain cautious. As part of our Never The Same Again programme to embed the positive changes in ways of working through the crisis, we are today announcing proposals to further streamline store operations and management structures."
As part of this, M&S on Tuesday said it expects to cut around 7,000 jobs over the next three months.
These will include departures in its central support centre, regional management and UK stores, "reflecting the fact that the change has been felt throughout the business".
It does, though, expect to create new jobs as it invests in online fulfilment and the new ambient food warehouse.
"The streamlining programme is an important step in delivering on our cost savings programme and ensuring we emerge from the crisis with a lower cost base and a stronger more resilient business," M&S said.
M&S said the cost of the programme including redundancies will be reflected in a significant adjusting item to be included in its half-year results.
M&S is scheduled to release its results for the half year to the end of September on November 4.
Shares were up 0.5% at 114.15 pence early Tuesday in London, though remain down almost 50% so far in 2020.
By Lucy Heming;Â [email protected]
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