M&S sales down 7.1 per cent
More than 1200 jobs to go.
Group sales were down 1.2 per cent, UK sales down 3.4%, General Merchandise -5.5% (Clothing -6.5%; Home +1.0%) and Food -1.1 per cent. UK like for like sales were down 7.1 per cent : General Merchandise -8.9 per cent; Food -5.2 per cent.
The company is to close 27 stores, including 25 small underperforming Simply Food stores and two small main chain stores, resulting in the loss of around 780 jobs. Another 450 jobs are to go from head office.
‘UK retail gross margin for the full year is now expected to be around 175 basis points lower than last year as a result of increased promotional activity and our decision to invest in price for the benefit of our customers, especially in Food.’ said Chairman Stuart Rose.
‘We continued to control costs tightly and now expect operating cost growth for 2008/09 to be towards the lower end of our guidance of 4-5%.’ he added.
Unions have said they are shocked by the news.
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.”
