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...protecting staff during a retail shake-up

With the news that Marks & Spencer will be closing up to 60 clothing and homeware stores over the next five years, questions have arisen over the potential loss of jobs as a result of a shift in operations.

Commenting on the drastic overhaul of M&S’ retail presence, Zee Hussain – Head of Corporate Services – explains the company’s responsibilities to employees as they face a potential cut in their workforce.

Not just any stores, M&S clothing stores

Marks & Spencer’s announcement to close a large portion of loss-making clothing and homeware stores came amid rumours that the retailer were planning drastic measures to mitigate falling profits.

The UK heritage retailer’s half-yearly report posted an almost 90% fall in bottom-line profits, amassing £25.1 million in profits during the six month period to the start of October, this compares to £216 million during the same period a year ago.

In the immediacy, 30 clothing and homeware stores will be closing, with dozen more of these typically larger stores converted into food stores.

It is claimed that falling interest in M&S’ clothing offerings is one the main causes of reduced profits, meanwhile the retailer’s upmarket food offerings are still popular amongst busy commuters, with food stores generally providing positive sales figures.

Closing clothing and homeware stores in favour of dedicated food stores represents a significant shift for M&S, who are known for their large combination stores that stock both types of products.

With planned closures and conversions to food stores, the retailer has predicted that, in total, it will have 60 fewer clothing and homeware stores in five years’ time.

No indication of job losses

As it stands, there has been no indication from M&S regarding job losses caused by this move, however alongside the planned shake-up of its offering in the UK the retailer will be closing 53 of its overseas stores, across 10 markets, which will lead to 2,100 job losses.

As the retailer will be opening 200 new food stores in the UK in the midst of closing clothes stores, it is unlikely that the number of job losses will be as high in the UK.

Despite this, the company did cut 525 head office jobs earlier this year, with incoming Chief Executive Steve Rowe looking to and reduce operating costs.

Currently, M&S employs around 71,000 people in the UK, and while some shop floor staff could be moved over to new food stores, there have been no guarantees that jobs will be protected during this change of retail presence.

Zee explains the difficult position M&S could find themselves in if they attempt to cut jobs while filling positions for any new food stores:

“The move by M&S to readjust its focus to its profit-making food stores has been rumoured for a while and the retailer has finally made a statement in this regard.”

“While we know that 2,100 jobs will be lost overseas, there has been no indication of how the closures could affect staff in the UK.”

“With the company’s Chief Executive announcing that 200 new food stores will be opening, I do suspect that a number of employees currently working in stores set to close will be transferred across to these new stores.”

“The difficulty for M&S is if they try to make some members of their shop floor staff redundant after closing stores and then begin advertising for the same positions in a new food store.”

“If they’re looking to open 200 new stores then they will have to offer staff affected by store closures the chance to transfer to one of these new stores before making them redundant, otherwise they may find themselves subject to employment tribunal claims from affected employees.”

“It would be a different story if the roles and responsibilities differed between the roles that are being cut and the potential job positions that could be offered in the new stores; however, on the face of it, the job titles and descriptions for the food stores are likely to be the same as those that could be cut from clothes stores.”

Written by Zee Hussain.

For more information on employment law and the services offered by Simpson Millar, please call:

0808 129 3304

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