UK high street continues to lighten
There has been a growing trend in the UK as more and more retail units enter the rental market. Despite the UK economy and strength of the pound returning, more retailers are having to find ways to make savings.
Marks and Spencer, who have a long and an illustrious history on the high street, have now announced the planned closure of 100 UK stores by 2022. The move has been hinted at for some time but has now been accelerated as the retailer looks to cement the brands' long-term future on the high street.
Initial figures suggest this announcement will affect up to 872 jobs, with operations director Sacha Berendji stating "Closing stores isn't easy but it is vital for the future of M&S.” The chain boasts over 1,000 stores, and as customer shopping habits change the need for so many has increasingly diminished. The brand is aware of this, looking to make better use of the current roster and cutting back where needed.
"M&S is repositioning itself for the new retail world," said Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown. "Having a huge store estate is no longer the powerful retail force that it once was."
Investors will be hoping for positive results when the company publishes its annual results on Wednesday. Analysts have been producing pre-tax profit estimates of around £573m, which may seem strong but does represent a drop on last year’s profit of £613m. Shares have fallen by over 25% in the last twelve months, and it seems these figures have forced M&S to make real change now.