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| M&S to close stores and cut jobs | M&S to close stores and cut jobs |
| (about 1 hour later) | |
| Marks and Spencer plans to close 25 of its small Simply Food stores and another two of its normal stores. | Marks and Spencer plans to close 25 of its small Simply Food stores and another two of its normal stores. |
| The closures will mean the loss of 780 jobs. The retailer is also planning to cut 450 head office jobs. | The closures will mean the loss of 780 jobs. The retailer is also planning to cut 450 head office jobs. |
| The announcement came with its Christmas trading statement. In the 13 weeks to 27 December, its UK like-for-like sales fell by 7.1%. | The announcement came with its Christmas trading statement. In the 13 weeks to 27 December, its UK like-for-like sales fell by 7.1%. |
| M&S warned that its margins would be lower this year as a result of discounting, especially in food. | M&S warned that its margins would be lower this year as a result of discounting, especially in food. |
| In the run-up to Christmas, the retailer held two sale days where it cut prices by 20%. | |
| M&S said that it had 15% less stock when it began its sale on 27 December than it had the previous year. | |
| Pension cuts | Pension cuts |
| Overall group sales fell by 1.2%, though there was a 26.9% increase in international sales and a 29% rise in onlne sales. | |
| The retailer hopes that its redundancy programme, store closures and pension cuts will reduce its annual running costs by between £175m and £200m. | |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| M&S plans to cap increases in its staff's pensionable pay to just 1% per year, reducing the liabilities of its final salary pension scheme. | |
| This will severely reduce the future build-up of pension under the current final-salary scheme. | |
| Staff who joined before 1996 will also find that their pensions will be cut more dramatically if they chose to retire early. | |
| "We are aware that the proposed changes set out above will be difficult for those members of staff impacted," said M&S boss Sir Stuart Rose. | "We are aware that the proposed changes set out above will be difficult for those members of staff impacted," said M&S boss Sir Stuart Rose. |
| "But given that we expect challenging economic conditions to continue for at least the next 12 months we believe we are taking the right action to maintain the strength of our business." | "But given that we expect challenging economic conditions to continue for at least the next 12 months we believe we are taking the right action to maintain the strength of our business." |
| The better news for the business was that it had maintained its market share in the clothing business, saying it had done particularly well in lingerie and childrens' clothing. | The better news for the business was that it had maintained its market share in the clothing business, saying it had done particularly well in lingerie and childrens' clothing. |
| M&S also said 23 December had been its record day for food sales, with sales of more than £50m. | M&S also said 23 December had been its record day for food sales, with sales of more than £50m. |
| Reduced costs | |
| Of its cost cutting target, about 20% will come from shaving between £35m and £40m from its annual pension contributions of £300m a year. | |
| The days of laurels and awards for Marks' well-known executive chairman probably feel to him like a lovely distant memory Robert Peston, business editor, BBC News Read Robert Peston's blogCheck M&S share price | |
| M&S revamped its pension scheme just two years ago to deal with a deficit of £704m. | |
| The changes involved the firm committing the rental income from £500m worth of its property portfolio to the scheme. | |
| The most recent annual accounts show that as of March 2008, the scheme had swung back into the black, with a surplus of £484m. | |
| But the slump in share values in the past year may have pushed it back into the red since then. | |
| A spokeswoman said its current level of contributions might swallow up about half the company's expected annual profits in the coming years, so the situation "was not sustainable for the long term". | |
| The scheme closed to new joiners in 2002, but still has 21,000 contributing members, many of whom are in a section that does not require them to make any contributions. | |
| The company said it would not be consulting directly with its staff over the planned limit on pension accrual. | |
| A spokeswoman said the planned changes were to do with company pay policy, not the structure of the scheme itself, and that the scheme's trustees were "happy". | |
| Have your been affected by issues covered in this story? Are you a Marks and Spencer employee? Send us your comments using the form below. | Have your been affected by issues covered in this story? Are you a Marks and Spencer employee? Send us your comments using the form below. |