M&S to shut more UK stores as H&M also scales back

Retailer Marks & Spencer said it plans to close a further 14 stores in Britain, speeding up a programme to re-shape its store estate as more sales move online.

The news comes as comes as competitor Hennes & Mauritz (H&M) — the world’s No 2 fashion retailer — announced its biggest stores-closure programme in at least a decade, and the creation of a new brand to sell marked-down clothing.

H&M also said it too would invest online. M&S said in 2016 it would reposition about 25% of its clothing and home space through a combination of closures, downsizes, relocations and conversions to food-only stores.

In November, three months after retail veteran Archie Norman joined as chairman, it said it was accelerating this programme.

It said yesterday six UK stores would close by the end of April, while a further eight had been identified for closure. M&S, which earlier this month disappointed investors with its Christmas trading update, has also reassessed and reduced the opening programme for its Simply Food stores, and now only plans to open a total of 36 owned or franchised stores over the next six months.

“We believe these changes are vital for the future of M&S and we will continue to accelerate the programme,” said director of retail Sacha Berendji. Shares in M&S, down 10% over the last year, fell 1% in the latest session in London.

M&S currently has 1,025 stores in the UK — 302 clothing, home and food, 684 food-only and 39 outlets. Sweden’s H&M, meanwhile, got a thumbs-down from investors to its plans to shut 170 stores this year, even as it adds a format called Afound, which joins the main H&M chain and other recent additions like Arket. The retailer said it would invest more in online sales, while adding shops in markets that are still growing.

The shares fell as much by over 9% at one stage in Stockholm. They have lost more than a quarter of their value in the past three months. The slump brings H&M’s market value to 235 billion kronor (€24.1bn), equivalent to about a quarter of what Zara owner Inditex is worth.

“There is little in the statement to suggest that H&M can reignite its top line anytime soon,” said Richard Chamberlain, an analyst at RBC Capital Markets.