Marks & Spencer, following a recent audit of European markets, has decided to close all its Polish clothing stores. The company is betting on a new retail strategy to save its business.
Penalties up to GBP 200 million
According to estimates, penalties for breaking lease agreements could reach up to GBP 200 million. The move also leads to mass layoffs and the closure of its London office.
"Our operations in Poland are not sustainable. We are aware of the impact proposed changes will have on our employees and we would like to hear their views on our proposal." — says Jonathan Glenister, Regional Director for Europe, China, and India at Marks & Spencer, in an interview for money.pl.
GBP 45 million annual loss
Marks & Spencer in Poland to focus on food boutiques
Since 2008, the company has recorded declining clothing sales. Annual losses amounted to GBP 45 million, while annual revenue stood at GBP 171 million. The same applies to 42 locations in other countries, including France, Belgium, and the Netherlands. Instead of clothing, the firm plans to open small grocery stores, up to 200 in total. Will this strategy succeed?
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Summary
Marks & Spencer, after auditing European markets, has decided to shut down all its Polish clothing stores. The breach of lease agreements may cost the company up to GBP 200 million, with mass layoffs and closure of the London office planned. Regional Director Jonathan Glenister admits that operations in Poland are “not sustainable.”
Problems are not limited to Poland — clothing sales have declined since 2008, resulting in annual losses of GBP 45 million against revenue of GBP 171 million. Cuts will also affect 42 stores in countries such as France, Belgium, and the Netherlands. Instead of clothing, the company plans to open up to 200 small food boutiques.
