Britain's M&S to close stores as profits fall

Britain's Marks & Spencer said on Tuesday it would shut stores at home and abroad, with its new chief executive seeking to cut costs as part of a revival plan.

The clothing and food retailer said it would reposition about 25 percent of its UK clothing and home space.

It will close about 30 full line UK stores and change around 45 stores to only sell food. Other stores would be re-located.

Oli Scarff, Getty Images

The cost of the programme would be £50 million ($62 million) for the next three years, rising to about £100 million in years four and five.

M&S also plans to focus its international business on a franchise model, exiting its loss-making owned business across 10 markets, at a cost of £150 million-£200 million over the coming 12-month period, thereby eliminating annual losses of £45 million.

M&S also reported an 18.6 percent fall in underlying pretax profit for its first half to Oct. 1 of £231.1 million along with a 2.9 percent fall in second-quarter underlying clothing sales. Like-for-like food sales were down 0.9 percent.

The retailer also announced that it did not plan to raise its prices on clothing and other goods to compensate for the fall in the pound caused by the Brexit vote, its chief executive said on Tuesday.

"We've obviously got currency pressures that have come on to us recently but we intend to mitigate those through better sourcing, by better volumes with our manufacturers and our intention is that we won't have to pass those price rises on to the consumer in the New Year," Steve Rowe told BBC radio.

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