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M&S to axe 300 HQ staff and close 25 Simply Food stores
Jonathan Prynn, Consumer Affairs Editor07.01.09
Marks & Spencer is to axe about 300 jobs at its London headquarters.
The retail giant said about one in six posts in Paddington will have to go as part of a cost-cutting drive that will result in 1,230 redundancies across the group.
The embattled chain announced a 7.1 per cent fall in sales in the run-up to Christmas and said it planned to close 27 smaller stores that struggle to make money, including 25 Simply Food outlets.
Marks chairman Sir Stuart Rose said the job losses and store closures were regrettable but inevitable in the current climate.
He said: "It's unfortunate and no one likes doing it but that's where we are.
"We are aware that the proposed changes will be difficult for those members of staff impacted, but given that we expect challenging economic conditions to continue for at least 12 months we believe we are taking the right action."
The initiative will save between £175million and £200million a year by next year, Sir Stuart said. But he denied that morale at Marks, which employs 75,000 globally, had been badly damaged by the cuts.
He said: "I don't think it's glum. People are very professional in this business. They know the score, they read the newspapers."
The announcement comes in a grim first week of the year for job losses.
Yesterday the last 200 Woolworths stores closed for ever and the owners of the Stag Brewery in Mortlake said it would shut down with the loss of 300 jobs.
More than 1,000 jobs are set to go through the closure of the Adams children's clothing and Passion for Perfume high street chains.
The future of a further 1,900 British jobs remains in doubt following the collapse of china and glassware group Waterford Wedgwood.
There was more bad news for thousands of Marks employees who are keeping their jobs. Pensionable pay rises for the 21,000 staff in the group's final salary scheme are to capped at one per cent.
In addition, the generous early retirement benefits for long-standing members of the scheme are being watered down.
Overall the figures were not as bad as some of the worst forecasts from the City, suggesting Marks's strategy of enticing Christmas shoppers with heavily promoted discount days paid off.
It recorded its best ever trading day on 23 December when its tills rattled up £50million of takings. Marks's shares rose 3p to 241.75p in early trading. They echo trading updates from rivals Next and Debenhams this week which, while downbeat, were not as bad as the City feared.
Marks's UK sales of clothing and other non-food lines were down 8.9 per cent while food sales dropped 5.2 per cent.
Sir Stuart said Marks had held on to its market share in clothing with particularly strong performances from lingerie and children's ranges. Overall group sales fell by 1.2 per cent, helped by a 26.9 per cent increase in international sales.
Reader views (9)
The branch at the Grafton Centre will be sadly missed. It always seems to be trading well so cannot understand this closure. There is no other food store in the Grafton area and the older people who always shop there will miss it terribly. We will again have to use our cars to shop. These closures have such a ripple effect and it starts with the staff losing their jobs but it doesn't end there...........
- Edna Harris, cambridge
i have heard that lymington m and s are closing?
- Ms Allen, lymington, hampshire
It was surprising that M & S opened such a small store at the outset, when there were many larger sites available in the town, but unfortunately Woking Council have always had a negative attitude about encouraging "quality" stores to set up in the town - many years ago the Council influenced by a faction on the Chamber of Commerce were not enthusiastic about having this company.
Sadly, the present shop limited by space was unable to cater for the many needs of this wealthy town which meant consumers going elsewhere.
A grim day for Woking!
- Norman Penty, Woking, Surrey
The closure of a super M+S Simply Food shop in Trowbridge is a disaster. The M&S shop brought real style and great food to Trowbridge and nearby small towns. M&S will rue the day when they made this decision and Stuart Rose should immediately reconsider. He is letting down the high profile of his company in the interest of profit rather than customer service.
- L Gibson, Trowbridge
Sudbury is a small market town in Suffolk, M&S opened there about 2 years ago along side Woolworths. On Monday Woolworths closed for the last time, M&S is the next sizeable shop in the town, now due to close.
Sudbury will and is suffering hard times, it's such a shame multi-national companies seem to abuse these small market towns in such a way that as soon as the going get's tough, they leave.
M&S should've done their research on this town and realised there wasn't a need for another food store in a town with a population of 20,000 with 5 multi-national supermarkets already.
- Shaun, Sudbury
Sad to hear the Woking store is on that list but it is pretty small one - always busy though.
- Isabel, Woking
These are the ones which are going:
Simply Food Stores:
Grafton Centre, Cambridge
Bracknell
Torquay
Imperial Wharf
Harbourside Bristol
Newtownards
Trowbridge
Letchworth
Huntingdon
Marlborough
Braintree
Caversham
Balham
Palmers Green
Colmore Row
Evesham
Tewkesbury
Whitley Bay
Newcastle-under-Lyme
Biggin Hill
Sudbury
Ripon
Melton Mowbray
Honiton
Market Harborough
Main Chain Stores:
Valley Park Croydon
Woking
- Dan, East London
The Imperial Wharf branch is our workplace's local M&S, it has been open for less than a year and is one of the shops targetted for closure. Anyone with half a brain would have known in advance by simply studying the local facilities that it would never have generated enough turnover to break even let alone turn a profit.
- Bob, Cheam
It really dosn't surprise me that the food shops are closing. As nice as the food is, it is so overpriced. If they did a few more meal deals and 2 for 1's more people might shop there. They have been greedy for far too long.
- Triffidqueen, Desk in London
