Marks & Spencer to step up store closures after £201.2m loss | Marks & Spencer

Marks & Spencer is to step up store closures after diving £201.2m into the red after clothing and homeware sales slid by almost a third during the high street lockdowns.

Food sales rose by 1.3% at established stores in the year to 3 April as M&S missed out on the shift to online groceries for most of the year until it launched a delivery service with specialist Ocado in September.

The company said it planned to increase its capacity to sell groceries online by 50% as its products now made up more than a quarter of the average order on Ocado.

The group increased online sales of clothing and homewares by almost 54% but that was not enough to offset the 56% slump in sales on the high street, where most stores were unable to fully operate as part of efforts to control the spread of Covid-19.

The group’s full year pre-tax loss of £201.2m compared with a profit of £67.2m a year before.

Steve Rowe, the chief executive, said: “In a year like no other we have delivered a resilient trading performance.” He said the group had fixed the basics and now had the right team in place to “accelerate change in the trading businesses and build a trajectory for future growth”. He said: “We now have a clear line of sight on the path to make M&S special again. The transformation has moved to the next phase.”

He said M&S would be accelerate its plan to close outdated stores to build a chain of 180 main sites around the country, down from 254 at present. M&S said it would permanently move out of about 30 locations, and a further 110 large stores would become food only, or several stores would be combined into one. Some sites will be redeveloped into homes.

About 17 new or expanded full-line stores will open over the next two years, including in a number of former Debenhams sites.

M&S has already closed 59 full-line stores, 16 food stores and eight discount outlets. It has previously said it would close just over 100 stores.

The company said it did not expect to pay a dividend in the current year as it invested in building its online business and improving stores.