UK's Marks & Spencer to cut up to 1 230 jobs

British retailer Marks & Spencer said on Wednesday it would close 27 stores and eliminate as many as 1 230 jobs.

The disclosure added further gloom to the British retail sector as it struggles with the economic downturn. The company also said that its 2008 year-end sales had fallen by 7.1 percent, and that it was taking steps to cut costs.

Marks & Spencer, a long-established landmark on many high streets, announced early in November that net profit sank 43 percent in the first half of the year as it faced tough trading.

The 27 store closures will target the company's Simply Food outlets specialising exclusively in food products, and affecting mainly 25 small under-performing food stores, a move which will mean the loss of 780 jobs.

In addition, Marks & Spencer said it planned to eliminate as many as 450 posts in administrative services and would reduce retirement benefits.

The measures are expected to save £175-200 million ($261-298 million) (about R2,6-4,4bn) in the company's next fiscal year, which begins April 1.

"We are aware that the proposed changes ... will be difficult for those members of staff impacted, but 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," Marks & Spencer chairman Stuart Rose said.

Source: AFP

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