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Marks & Spencer to cut 1230 jobs

24
Jan '09
Marks & Spencer Group Plc released Interim Management Statement for third quarter of 2008/09.

• Group sales down 1.2%
• UK sales down 3.4%: General Merchandise -5.5% (Clothing -6.5%; Home
+1.0%) ; Food -1.1%
• UK like for like sales down 7.1%: General Merchandise -8.9%; Food -5.2%
• Online sales up 29%
• International sales up 26.9%
• Clothing market share maintained; strong growth in volumes
• Food initiatives deliver improved performance with a record trading day of over £50m on 23 December
• Cost initiatives set to reduce underlying cost base by £175m to £200m

Sir Stuart Rose, Chairman said:
“Group sales were down 1.2%. Sales in the UK were down 3.4%. Our trading stance throughout the quarter enabled us to offer our customers great value, grow our volumes, maintain our leading market position and uphold our ethical stancei. Our post Christmas sale which started on 27 Decemberii with 15% less stock into sale than last year has cleared quickly.”

“We have made good progress on the key priorities set out at the interim results in November.”

“We maintained our market share in Clothing with particularly good performances in Kids and Lingerie. Volumes were strong across all areas of Clothing. Home also performed well, growing sales by 1% with quality, great values and trust in the brand being important drivers. Online performed strongly in Q3 with record traffic driving sales up 29%; stock clearance was especially fast.”

“Food showed an improved trend quarter on quarter, reflecting the initiatives put in place around better values, promotional stance, innovation, increased availability and reduced waste. This improvement accelerated as we entered the Christmas period, culminating in our biggest trading day ever on 23 December with record sales of over £50m.”

“Our International store opening programme helped drive continued growth in sales, up 26.9%. UK retail gross margin for the full year is now expected to be around 175 basis points lower than last year as a result of increased promotional activity and our decision to invest in price for the benefit of our customers, especially in Food."

“We continued to control costs tightly and now expect operating cost growth for 2008/09 to be towards the lower end of our guidance of 4-5%. We have also made further progress on actions to reduce our underlying cost base in 2009/10 and are now expecting UK operating costs for 2009/10 to be between one and two percent below 2008/09, a reduction of £175m to £200m, after taking space growth and inflation into account.

This reduction in costs includes the benefit of a number of proposals that we are announcing:
• We have reviewed our store portfolio and, subject to consultation with staff, are proposing to close 27 stores. 25 of these are small underperforming Simply Food storesiii and two are small main chain stores. Around 780 jobs may be lost asa result of these proposals.


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