Multinational UK retailer Marks & Spencer (M&S) has entered into the restructuring phase of its three-part transformation programme that began three years ago.
Part of this turnaround plan will see it close 30 locations over the next 10 years, while another 80 will either be moved to better locations or merged with nearby shops.
Outlined in its 2020/21 full year results - which saw it record losses after tax of £194.4m - the business recognised that Covid-19 would “accelerate market trends”. As such, it provided the firm with a “opportunity” to bring forward transformation through the Never the Same Again programme, with the aim of emerging out of the pandemic as a reshaped business.
Part of this work saw the company partner with food shopping delivery service Ocado - delivering the firm a 43.7% revenue growth over the 52 weeks ending on 28 February 2021, and contributed a share of net income of £78.4m.
Additionally, its net debt excluding lease liabilities declined by £278.6m and total net debt was down by £434.7m.
The pandemic has impacted the performance of its clothing and homeware business, with lockdowns causing sales to fall by 31.5%. Sales in the vertical has, however, been growing since non-essential retail opened in the UK.
Commenting on the results, M&S chief executive Steve Rowe said: “By going further and faster in our transformation through the Never the Same Again programme, we moved beyond fixing the basics to forge a reshaped M&S. With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again. The transformation has moved to the next phase.”
Overall, M&S says its priority over the coming years is to “fund investment in the transformation and to build balance sheet metrics towards levels consistent with investment grade”.