May 28, 2019
Is M&S set to turn property developer?
May 28, 2019
Marks & Spencer is looking at redeveloping some of its retail stores into homes and offices as part of a major plan to raise cash and make its property portfolio work in its favour.
The struggling department store announces plans to close a further 110 stores last week after seeing falling profits and sales.
Like several other retail chains, Marks & Spencer is struggling to continue to operate with a large store estate as more and more shoppers move online. Brexit uncertainty and low consumer confidence are also impacting sales, forcing retailers to launch CVAs and store closure programmes to survive.
So Marks & Spencer is at the early stages of a new initiative to redevelop some of the land it owns. Andrew Turton has been appointed as property development director at the business, and he has already begun studying the feasibility of transforming 20 big assets, reported MarketWatch on Friday.
Chief Executive Steve Rowe said: “We own some very grand properties in town centers, and we believe that over a period of time those can be developed and release value to the business in terms of development as new, modern formats and possibly allow other use and development. I think that is about as far as I can go.”
Entering the residential real estate market could help Marks & Spencer boost its balance sheet following a tough year. In the 52 weeks ended 30 March, the firm saw pretax profit fall to £523.2 million from £580.9 million, while revenues remained flat at £10 billion.
The company is moving forward with a five-year turnaround plan and on Wednesday it announced a £600 million rights issue to help fund a joint venture with online supermarket Ocado.
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