Marks and Spencer to axe 4,390 jobs

Marks & Spencer is to axe 4,390 jobs as it closes its European subsidiaries and its Direct catalogue business in the UK.

The shake-up comes as the troubled retailer announces that it will focus on its traditional strengths, clothes and food.

M&S has drawn up a recovery plan for clothing and plans to expand products such as food, home and beauty. Its stores will also be revamped in a bid to win back customers.

The firm plans to cut its losses by closing its European operations and catalogue business, and by selling its profitable Brooks Brothers and Kings Super Markets in the US.

The changes will lead to 4,390 job losses, with 3,350 of these being axed in Europe. The closure of the Marks & Spencer Direct catalogue business will lead to 690 redundancies, while 350 will be lost at head office.

These measures will return an estimated £2 billion of cash to shareholders by the end of March, 2002 .

Chairman and chief executive Luc Vandevelde says: "These changes put in place a clear, thorough and urgent plan for recovery based on the UK business. At the heart is a determination to restore an unquestioned reputation with our customers for quality, value, service and innovation.

"By creating a simpler, more focused organisation, we will be able to get on with what we do best, to be better positioned to deliver faster recovery and, in time, seize new opportunities both in the UK and abroad. "

Mr Vandevelde adds: "We are confident that both customers and shareholders will benefit as a result.

"We recognise these changes will be painful for some of our people. We very much regret this, but the decisions have not been taken lightly. They are essential to building a stronger future for Marks & Spencer."