The department store chain, which also reported a sharp drop in half-year profits, said it would close about 30 “full line” branches, selling clothing and homewares, while reconfiguring about 45 more to its Simply Food brand.
The net result will see its number of full line stores, which currently stands at 304, fall by about 60 over the next three years. The group also said the expansion of its Simply Food business would see more than 200 stores opened by the end of 2019.
“Our aim is to build a sustainable business which will delight our customers, provide a robust foundation for future growth and deliver value for our shareholders in the long term,” said chief executive Steve Rowe.
He added: “We have now completed a forensic review of our estate both in the UK and in our International markets. Over the next five years we will transform our UK estate with about 60 fewer clothing and home stores, whilst continuing to increase the number of our Simply Food stores. In the future, we will have more inspiring stores in places where customers want to shop that complement our growing digital offer.”
Rowe also announced the planned closure of all 53 of M&S’s wholly-owned stores in Belgium, China, Estonia, France, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia.
He said these operations, which employ about 2,100 people, made a loss of £45 million last year and there was a “limited opportunity for future growth in these markets”.
The overhaul came as M&S reported an 88.4 per cent slump in statutory pre-tax profits to £25.1m for the six months to 1 October, on group revenues 0.9 per cent higher at £5 billion. The interim dividend, to be paid on 13 January, was held at 6.8p a share.
Rowe said the cost of withdrawing from overseas markets would be between £150m and £200m, while the shake-up of its UK store network will see a net reduction of about 10 per cent in clothing and homewares selling space.
He added: “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.”
Rowe said the group did not have a full list of outlets closing, adding that it would look at the overhaul on a “store-by-store” basis, with the UK restructuring set to cost about £350m over five years.