Marks & Spencer is Closing Down: Advises 2100 Job Cuts
The ongoing rumors about Marks & Spencer closures have finally been confirmed. Although the solid figure for job cuts has not been determined, they confirmed that 30 of their full line stores would shut down while 45 will be converted into Simply Food stores. This is after a huge drop in the company's profits.
They earlier announced that there was an 18.6% drop in their half-year profit while bottom-line profits plunged by 88.4%. CEO Steve Rowe further confirmed that they are shutting down 53 stores across international markets-including seven stores in France and 10 in China. They are also pulling out of Lithuania, Estonia, Belgium, and Hungary. All these are expected to put 2,100 employees at risk.
It was an unexpected move for Marks & Spencer, but the brand has failed to cope with the growing demand for online and discount stores, which triggered the fall of their clothing line. The weak economy in Europe and the unstable economy of the Middle East and Asia had also played a part in the weakening of the company in the international market.
Some analysts, on the other hand, aren't too keen about the decision of Marks and Spencer. Many have said that instead of "giving in," the better thing to do is for the brand to improve their once very successful fashion range. Phil Dorrell, a retail consultant, advised: 'It feels like, by closing stores and cutting jobs without an accompanying announcement on a new strategy, M&S are giving in. Or rather, they are still digging, but this time a trench to retreat in to.
Rowe, however, said that this does not mean the end for M&S, he said '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.'
