Marks & Spencer has announced plans to cut 7,000 jobs in its shops and head offices.
The long-troubled retailer said it expects a significant proportion of the job losses to be through voluntary departures and early retirement.
“It is clear that there has been a material shift in trade and whilst it is too early to predict with precision where a new post Covid sales mix will settle, we must act now to reflect this change,” it said in an unscheduled trading update
Revenue in its clothing and homeware business was down 38.5% -on-year in the 13 weeks to August 8, while the food business recorded a rise in sales of 2.5% over the same period. “The performance of store sales has varied widely across the estate with some of the newer out of town stores trading close to last year’s level of sales overall in recent weeks but legacy town centre stores and some shopping centres still heavily impacted by social distancing and reduced footfall,” M&S said.
Freddy Khalastchi, business recovery partner at accountancy firm, Menzies LLP added, “The scale of these cuts demonstrates that M&S means business. This is not just about cost cutting, it is about repositioning the business for growth in a market that has demonstrably changed for good.
“Consumer shopping habits have transformed during the pandemic. As a result, many bricks and mortar retailers have been forced to take drastic action to rightsize their business models by stripping away superfluous layers of management and back office support services.
“Coming on top of 950 job losses announced last month by the retailer, this development is a significant step that may well encourage others to bring forward radical restructuring plans in the next few months.”