In a strategic move to improve store efficiency and customer experience, British multinational retailer Marks & Spencer (M&S) has announced plans to reduce its "full line" stores from 247 to 180 over the next five years, while concurrently expanding its food shops from 316 to 420 through the launch of 104 Simply Food branches.
The company's shift towards food retail commenced earlier this year with the inauguration of new stores at Leeds White Rose and Liverpool ONE on May 25 and August 15 respectively. The retailer is investing £480 million in opening better stores across the UK as part of its strategy.
M&S's strategic shift comes amidst its strong financial performance. According to real-time metrics by InvestingPro, the company's revenue growth in the last twelve months (LTM2023.Q2) stood at an impressive 34.62%, with quarterly revenue growth for FY2023.Q2 at 61.32%. The company's adjusted P/E ratio for LTM2023.Q2 was 5.58, indicating a low earnings multiple relative to near-term earnings growth, a fact highlighted by InvestingPro Tips.
Despite the impending closure of several stores including the Eagles Meadow branch in Wrexham by year-end, M&S continues its expansion in the food sector with plans for a new Foodhall in the same area.
Earlier this year, M&S closed multiple stores located at East Kilbride Shopping Centre, Fenchurch Street in London, Deansgate in Bolton, Newport Road in Cardiff, Meadowbank retail park in Edinburgh, Linthorpe Road in Middlesbrough and Carlton Street in Castleford. These closures are part of the company's broader strategy of focusing on more profitable areas of its business.
InvestingPro Tips also points out that M&S has been consistently increasing its earnings per share and its valuation implies a strong free cash flow yield. However, it's worth noting that the company's stock price movements have been quite volatile, and it does not pay a dividend to shareholders.
Today's announcement highlights M&S's commitment to evolving its business model to meet changing consumer demands while ensuring improved customer experience across its stores. For more insights and metrics, interested investors can visit InvestingPro, which offers additional tips and real-time data on M&S and other companies.
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