This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7814987.stm
The article has changed 17 times. There is an RSS feed of changes available.
| Version 9 | Version 10 |
|---|---|
| M&S to close stores and cut jobs | M&S to close stores and cut jobs |
| (10 minutes 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. |
| STORES CLOSING See list of stores to be closed [31KB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader here | STORES CLOSING See list of stores to be closed [31KB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader here |
| In the run-up to Christmas, the retailer held two sale days where it cut prices by 20%. | 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. | 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 |
| Marks and Spencer's overall group sales fell by 1.2%, though there was a 26.9% increase in international sales and a 29% rise in online sales. Total UK sales fell by 3.4%. | Marks and Spencer's overall group sales fell by 1.2%, though there was a 26.9% increase in international sales and a 29% rise in online sales. Total UK sales fell by 3.4%. |
| The retailer hopes that its redundancy programme, store closures and pension cuts will reduce its annual running costs by between £175m and £200m. | The retailer hopes that its redundancy programme, store closures and pension cuts will reduce its annual running costs by between £175m and £200m. |
| 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. | 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. |
| 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 | 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 |
| This will severely reduce the future build-up of pension under the current final-salary 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. | 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." |
| Keith Bowman at the stockbrokers Hargreaves Lansdown described the figures as "highlighting challenging but not disaster conditions on the UK High Street". | Keith Bowman at the stockbrokers Hargreaves Lansdown described the figures as "highlighting challenging but not disaster conditions on the UK High Street". |
| But he warned that the difficulties facing M&S could not be ignored. | But he warned that the difficulties facing M&S could not be ignored. |
| "Consumers globally are in retreat, the dividend payment is still under review and the group's expansion into small food outlets is now in tatters," he said. | "Consumers globally are in retreat, the dividend payment is still under review and the group's expansion into small food outlets is now in tatters," he said. |
| Record day | Record day |
| The retailer maintained its market share in the clothing business, saying it had done particularly well in lingerie and children's clothing. | The retailer maintained its market share in the clothing business, saying it had done particularly well in lingerie and children's clothing. |
| SALES BREAKDOWN Group sales down 1.2%UK like-for-like sales down 7.1%UK total sales down 3.4%Online sales up 29%International sales up 26.9%UK clothing sales down 6.5%UK home sales up 1%UK food sales down 1.1% Figures for 13 weeks to 27 December | SALES BREAKDOWN Group sales down 1.2%UK like-for-like sales down 7.1%UK total sales down 3.4%Online sales up 29%International sales up 26.9%UK clothing sales down 6.5%UK home sales up 1%UK food sales down 1.1% Figures for 13 weeks to 27 December |
| 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. |
| Sir Stuart Rose noted that there had still been plenty of people coming into his stores, with 56 million customers in the last 10 days before Christmas. | Sir Stuart Rose noted that there had still been plenty of people coming into his stores, with 56 million customers in the last 10 days before Christmas. |
| "The volumes that we sold were greater than last year and the traffic we had in our stores was as much as last year," he told the BBC. | "The volumes that we sold were greater than last year and the traffic we had in our stores was as much as last year," he told the BBC. |
| "We're just finding that customers individually didn't have as much to spend." | "We're just finding that customers individually didn't have as much to spend." |
| Analysts are predicting falling profits, despite the cost-cutting measures. | Analysts are predicting falling profits, despite the cost-cutting measures. |
| "The cost initiatives are to be applauded," said John Stevenson at KBC. | "The cost initiatives are to be applauded," said John Stevenson at KBC. |
| "With the pressure on gross margin we've got, and given the sales outlook, we still expect profits to be falling next year." | "With the pressure on gross margin we've got, and given the sales outlook, we still expect profits to be falling next year." |
| Mr Stevenson predicts that M&S profits will fall to £595m from last year's figure of £1bn. | Mr Stevenson predicts that M&S profits will fall to £595m from last year's figure of £1bn. |
| Reduced costs | 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. | Of its cost cutting target, about 20% will come from shaving between £35m and £40m from its annual pension contributions of £300m a year. |
| M&S revamped its pension scheme just two years ago to deal with a deficit of £704m. | 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 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. | 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. | 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". | 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 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. | 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". | 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. |