Marks & Spencer has warned it may need to temporarily close stores due to the impact of Covid-19 on its business.
The retailer said it was already seeing “substantial sales declines” in its clothing and home divisions and warned it would have to manage its costs accordingly but expected to redeploy a significant number of its employees to its food business.
It expects the pandemic will likely “severely” impact its clothing, home and international businesses over the next 12 months, but its food business will trade profitably throughout.
M&S said as part of it precautions to preserve its cost base it was unlikely to make a final dividend payment, which would result in an anticipated cash saving of around £130m. It is also deferring all pay increases and freezing non-essential recruitment and marketing expenditure.
In addition, the retailer is postponing capital commitments. It is committed to £80m of planned capital expenditure for 2020/21 from a budget of up to £400m.
M&S added that as a result it was unable to provide any meaningful guidance on its future earnings, but expected its pretax profit to be at the bottom end of its £440m to £460m range.
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