1,200 jobs to go at M&S, but homewares hold up

Home products performed better than all other categories at Marks & Spencer in the 13 weeks to December 27, which saw group sales down 1.2% overall and UK sales falling 3.4%.
Results issued today show that in the UK, general merchandise was down 5.5%, with clothing sales falling 6.5%, but helped by an increase of 1% in home sales. Food sales were down 1.1%.

UK like-for-like sales suffered a 7.1% drop.

However, the company enjoyed a 29% boost in online business.

Commenting on the results, chairman Sir Stuart Rose said: “Home performed well, growing sales by 1%, with quality, great values and trust in the brand being important drivers. Online performed strongly in Q3 with record traffic, driving sales up 29%; stock clearance was especially fast.”

He went on: “UK retail gross margin for the full year is now expected to be around 175 basis points lower than last year as a result of increased promotional activity and our decision to invest in price for the benefit of our customers, especially in food.”

The company also announced that it would be cutting around 1,200 jobs as part of a cost-cutting programme.

It intends to close 27 stores, mostly Simply Food outlets, but also two small main chain stores, with a loss of around 780 jobs. Up to 450 jobs will also go at the head offices.

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