LONDON — Marks & Spencer Group plans to shutter its wholly owned international stores as it reported a 91 percent slide in first-half profits to 15.9 million pounds, or $21.8 million.
Sales in the six months to Oct. 1 edged up 0.9 percent to 4.99 billion pounds, or $6.84 billion. Underlying profit was down in the half due to lower clothing and home sales, and a “significant charge” relating to pension changes, the company said.
Dollar figures have been converted at average exchange rates for the periods to which they refer.
The struggling retailer, which has been restructuring under the new chief executive officer Steve Rowe, said it plans to shut stores across 10 international markets.
The closures will cost 150 million to 200 million pounds, or $186 million to $250 million, over the next 12 months, eliminating annual losses of 45 million pounds, or $56 million. The retailer said it plans to continue with its profitable franchise partnerships in international markets such as India and Greece, and remains “fully committed” to its strategy of creating a sustainable, profitable and customer-focused international business.
M&S will close all of its 53 wholly owned international units, including 10 in China and seven in France, as well as all of its stores in Belgium, Estonia, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia.
The Paris Champs-Elysées flagship, which opened in 2011 under Rowe’s predecessor Mark Bolland, is expected to shut, although the company did not mention it specifically in the first-half statement.
M&S will instead focus on its British stores, with a five-year plan to improve productivity. It will also slash about 25 percent of space dedicated to clothing and home collections, and continue to roll out its standalone food stores. It said the total number of M&S stores would increase as a result.
Rowe said he’s committed to creating a “simpler business,” to building up clothing and home sales and to continuing to grow in food. “These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns,” he said.