M&S invokes wartime spirit over virus
Marks & Spencer said it was preparing for the contingency that some of its stores may have to close temporarily. In a gloomy update on the coronavirus impact, the 136-year-old firm said clothes sales have suffered.
But it added: “M&S has served customers without cease through two world wars and terrorist bombings and we are determined to support customers now.”
Also on Friday the Wetherspoon’s boss said his pubs would stay open, despite government advice to avoid pubs.
Tim Martin told the BBC there would be no pub closures despite the government’s advice for people to avoid pubs. “In the early part of the current week, following the Prime Minister’s advice to avoid pubs, sales have declined at a significantly higher rate,” he said.
But a shutdown in the face of coronavirus would be “over the top”, he said. He said a sensible balance was for pubs to open but to implement “social distancing” measures, like no drinking at the bar.
His stance is contrary to many other retail chains which have started to reduce hours or shut shops.
Marks & Spencer said it was planning for a “prolonged downturn” in demand for clothing and home goods, although it expected its food business to trade profitably throughout.
It said it had benefited on a “small scale” as customers stocked up on food, but its “heavy bias to chilled and fresh means we are not seeing the forward buying uplift experienced by the major grocers”.
Nevertheless, it said it expects to benefit from the “significant shift” to eating at home. “Although there will undoubtedly be supply interruptions, we do not expect these to be prolonged or financially material.”
“At this stage we are not assuming a return to normal trading in the Autumn,” the retailer added.
“However, our business model of operating parallel clothing and food businesses and our strategy to move online including the Ocado joint venture should provide more resilience than some single sector businesses.”
But Marks & Spencer said it was “preparing for the contingency that some stores may have to close temporarily”.
In addition it has:
- said it will not pay a dividend for this financial year
- postponed capital spending commitments
- redeployed staff from its clothing and home stores into food where possible
- deferred all pay increases
- frozen non-essential recruitment and cut marketing spend
Elsewhere, other businesses have revealed details of how the pandemic is affecting them.
- The owner of Sports Direct, Frasers Group, says Covid-19 is set to cause “significant disruption” to its business and it no longer expects to meet its earnings growth forecasts.
- Fashion retailer River Island temporarily shuts all its UK stores.
- InterContinental Hotels Group says demand for hotels is “currently at the lowest levels we’ve ever seen”. In China in February it saw revenue per available room – a key measure in the hotels sector – drop 90%. It expects this revenue measure to drop by 60% across its global business in March given the restrictions being put in place.
- Property listings website Rightmove says the speed of the slowdown in the housing market has been “significant”. It says it will cut its charges for agency, new homes and commercial customers by 75% from April for four months, which it says will cost it between £65m and £75m.
- Estate agent Foxtons says it anticipates “an inevitable material disruption” to trading in the coming months and is evaluating a number of measures to preserve cash.
- Heathrow Airport says it is taking steps to reorganise and shrink its operation to remain open during the crisis, but its financial performance will be “significantly impacted”. Measures it has already taken include reducing operating costs, cancelling executive pay, freezing recruitment and reviewing all capital projects.