The British retail chain Marks & Spencer announced on Wednesday that it will close 27 stores and eliminate as many as 1,230 jobs in order to better cope with challenging economic conditions.
This announcement has further worsened the bleak forecasts for the British retail sector, which is under pressure from economic slowdown. According to the statement, Marks & Spencer recorded a 7.1% decline in sales at the end of 2008 and is forced to take steps to reduce costs. This internationally established British company announced in early November that it recorded a 43% drop in net profit in the first half of the year. The announced closures pertain to the company’s specialized food stores "Simply Food," largely affecting 25 smaller underperforming stores, which will impact 780 jobs. In addition, Marks & Spencer plans to cut as many as 450 jobs in its administrative department. The company expects these measures to save between £175 million and £200 million (€193-220 million) in its next fiscal year, which begins on April 1. "We are aware that the proposed changes will hit the employees concerned hard, but given that we expect the continuation of challenging economic conditions for at least the next 12 months, we believe we are taking the right steps to preserve the strength of our business," said the company’s CEO Stuart Rose. (H)
