LONDON (Reuters) - Marks & Spencer MKS.L will cut a further 7,000 jobs, it said on Tuesday, as the COVID-19 crisis deals another blow to Britain's beleaguered retail sector.
“It is clear that there has been a material shift in trade and whilst it is too early to predict with precision where a new post-COVID sales mix will settle, we must act now to reflect this change,” M&S said.
Clothing and home trading in its stores remained well below last year though online and home delivery were strong, said the retailer, which has a UK workforce of about 78,000.
The 136-year old M&S is seeking to reinvent itself after decades of failed attempts. In May it said the crisis would indelibly change its business and that it would accelerate its turnaround plan.
M&S said the crisis had shown it could work more flexibly and productively with more employees multi-tasking and switching between the food and clothing and home divisions. Its use of technology has also increased.
Last month M&S shed 950 store management jobs. Its latest cuts will impact its headquarters, regional management and UK stores over the next three months.
M&S expects a significant proportion of its cuts to be through voluntary departures and early retirement. Shopworkers’ trade union Usdaw called for urgent talks.
“These proposals are an important step in becoming a leaner, faster business set up to serve changing customer needs,” CEO Steve Rowe said.
M&S shares were down 2.8% at 0818 GMT, extending 2020 losses to 48%.
The firm said it was retaining a cautious approach to planning for the balance of the year.
Group sales were down 19.2% year on year in the 19 weeks to Aug. 8, which included part of Britain’s lockdown period, with clothing and home sales down 49.1% and food sales down 1.1%.
Clothing and home sales were down 29.9% in the eight weeks since stores reopened. Store sales were down 47.9%, while online sales were up 39.2%.
Food stores, which traded throughout the lockdown period, saw sales increase 2.5% in the latest eight weeks.
M&S said it was on track to launch an online food service next month through its partnership with Ocado OCDO.L.
Reporting by James Davey; editing by Sarah Young and Jason Neely
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