M&S Marks and Spencer (MKS) likely to accelerate store closure plans this week
Marks & Spencer is expected to accelerate its transformation plans this week, as it reports another decline in profits.
The pace of change at the retailer could be “dialled-up”, according to analysts, who are forecasting a 6.6 per cent decline in profit before tax and adjusted items to £573m.
The company said in November that the results of store closures had been positive, and that it would accelerate its UK store rationalisation programme, which includes closures, space reduction and relocations. The Sunday Times reported this weekend that this could mean the number of closures increases from 60 to 100.
Analysts at Barclays said that the City’s interest would primarily be in the forward-looking commentary from the company.
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“At the interim results last November, new Chairman Archie Norman gave the impression that the existing turnaround plan was sensible but that the pace and extent of change might need to be ‘dialled-up’ significantly,” they said.
Meanwhile analysts from Liberum predicted that M&S will continue to see falling clothing sales, despite gains in online shopping, as well as “increasing pressure in the competitive food space”.
“M&S and its mid-price peers will continue to be squeezed by fast fashion, online, stronger brands and value players,” they said.
M&S is currently facing the risk of a landmark demotion from the FTSE 100 after more than 30 years in the blue-chip index. Its market value has shrunk to £4.8bn over the past few years, putting it in 102nd place. If it slips below 110 it will automatically be relegated.
On Saturday, it emerged that the company is courting former Dixons Carphone chief executive Katie Bickerstaffe to join its board. If pulled off, the move would bolster the retail expertise on a board which has been criticised for a lack of experience in the sector.
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