May 22, 2019

Marks and Spencer hit by heavy costs of turnround

Marks and Spencer has revealed a heavy blow to profits from the costs of its restructuring programme just as it hits shareholders with a steeply-discounted rights issue to fund half of Ocado's food retail business. The high street retailer took a £439m hit from exceptional costs in its results for the year to March 31, mainly from store closures, more of which are planned in the coming year. The group took a further exceptional charge of £222m to reflect the cost of its store closure programme, having taken a £320m hit for the same reason last year, and said it would close another 85 stores in addition to the 35 it has already shut. Clothing sales in the year were down 3.6 per cent in total, while food sales were 0.6 per cent lower. In the current year, it expects food sales to fall by 1 per cent and clothing sales by 3 per cent as a direct result of fewer stores.

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