LONDON — Marks & Spencer is going ahead with a second round of store closures in the U.K. as it sets out to reshape its retail strategy and put more focus on online sales.
The retailer revealed that 14 locations across the U.K. will shut this year as it aims to close a total of 100 stores by 2022. Stores located in Bayswater and Holloway Road in central London, Newton Abbot in Devon, Fleetwood in Lancashire and Clacton in Essex will close by the end of next year, while an additional nine locations will enter a period of consultation.
The company, which operates a total of 1025 stores across the U.K., said that all 636 affected employees will be offered re-employment in alternative M&S locations, “before redundancy is considered.”
In addition, the company will scale down the rollout of its “Simply Food” stores, with plans to open 15 fewer locations this year.
The store closures are part of a five-year program aimed at “making M&S special again,” by having a smaller network of bricks-and-mortar stores that will offer better customer experience through targeted central locations, new in-store digital features and click and collect services. The company’s goal is for its e-commerce channel to account for a third of the company’s total sales.
“We are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans. Closing stores isn’t easy but it is vital for the future of M&S,” said Sacha Berendji, retail, operations and property director at Marks & Spencer. “Where we have closed stores, we are seeing an encouraging number of customers moving to nearby stores and enjoying shopping with us in a better environment, which is why we’re continuing to transform our estate with pace.”
The announcement of the store closures highlights the company’s continuing loss of market share. According to Global Data, the company is close to losing its status as the number-one retailer in the U.K. clothing market to Primark, unless it starts growing its online and non-food sales.
“M&S has been losing share for more than two decades. In 1997 it achieved its peak clothing market share of 13.5 percent in the U.K. Its position seemed unassailable, but since then its market share has been on a declining trend,” said Maureen Hinton, group retail research director at Global Data. “The closure of yet more stores will hasten the decline unless it can shift the lost sales to its online channel and transfer to its other stores.”
Diane Wehrle, insights director at the retail consultancy Springboard, added that the retailer should also rethink its product offer in order to turn things around.
“With so many stores the investment required to overhaul store environments is substantial so the organization needs to rely wholly on its product and its appeal to consumers,” said Wehrle. “Whilst its online retailing is clearly diverting shoppers from the in-store environment, its product is where M&S is falling short, with an increasing number of competitors claiming the traditional M&S shopper via a combination of better price and offer.”