Marks & Spencer to Close 27 Stores, Cut 1230 Jobs

The Marks & Spencer Group plc (London) announced plans to close 27 stores and cut 1230 jobs.

The news came after a mildly disappointing third quarter for the retail conglomerate that is the UK’s largest apparel retailer and also operates food and furniture chains around the world. Same-store sales fell 7.1 percent in the quarter; clothing and furniture declined 8.9 percent and food dropped 5.2 percent. It is being called England’s worst downturn in more than 17 years.

“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,” said Marks & Spencer chairman Stuart Rose.

Consumer spending in Britain has slowed amid concerns about rising unemployment and falling house prices, forcing retailers to offer bigger-than-usual discounts. The harsh economic conditions have already caused some of the country’s trademark companies, like the crystal and ceramics maker Waterford Wedgwood and the household retailer Woolworths to go into bankruptcy.

Rose said the company had its biggest trading day ever on Dec. 23, 2008, selling more than $74 million of goods. He said 56 million customers walked into Marks & Spencer stores 10 days leading up to Christmas and that the retailer actually sold greater volumes than last year, but ''we're just finding that customers individually didn't have as much to spend.''

Marks & Spencer traces its origins to 1884, when Russian-born Michael Marks started to sell nails, screws and soap at a British market stall. Over the next 10 years, the business grew into 12 stores, at which point Marks brought in a bookkeeper, Thomas Spencer. The company now has more than 600 stores in Britain and nearly 300 international locations in 40 different countries.