Marks and Spencer (MKS) will make extensive job cuts after weak clothing and home sales offset progress in the retailer’s food business. M&S will shed around 7,000 jobs in its central and regional offices along with store personnel.
In May, Marks & Spencer said that it had written down £145m in clothing and home inventories in response to the coronavirus pandemic. The division had proven to be the retailer’s Achilles heel before the pandemic took hold, and revenues here fell 39 per cent over the last thirteen weeks. M&S attributed the slump to social distancing and reduced footfall, along with a shift in clothing sales from formal clothing to more casual wear, a trend that has been driven by a surge in home working.
M&S has increased its discounting activity as it bids to clear excess stock. In the eight weeks since its stores reopened, store sales fell 48 per cent, compared with a 39 per cent rise in online sales.
Peel Hunt forecasts full-year 2021 adjusted pre-tax profits and earnings per share of £66m and 2.7p respectively, rising to £215.7m and 8.7p in 2022.
