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M&S to axe 4,390 jobs
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March 29, 2001: 4:57 a.m. ET
UK retailer to cut jobs in major overhaul; to sell Brooks Brothers in U.S.
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LONDON (CNN) - Troubled UK retailer Marks & Spencer said on Thursday it plans to axe 4,390 jobs as part of a drastic overhaul of its business.
M&S plans to close its loss-making continental Europe operations with the loss of 3,350 jobs, sell U.S. businesses Brooks Brothers and Kings Super Markets, and return $2.9 billion to shareholders with sales of property.
UK clothing and general retailers have been involved in fierce competition in recent years that's seen prices cut and profits slump.
M&S, the former icon of UK shopping, also said it will now return to selling only own-brand products and brands exclusive to the company.
As part of the revamp, the retailer plans to close its shopping catalogue business, affecting 690 jobs, but said it remains committed to its e-commerce Web site. The company will also axe 350 head-office jobs.
Chief Executive Luc Vandevelde in an interview with CNN acknowledged that the future of retailing was international and admitted that its current "platform was not idle for an international strategy."
"We need to improve the UK before we export the concept," Vandevelde said. "We need to rebuild our relationship with our classically styled customer that we have neglected. We have to gain back her confidence."
Investors seemed to welcome the plan with M&S (MKS) shares gaining 6 percent in London to trade at 264 pence. The shares have gained more than 30 percent since the start of the year as investors expected the company to move forward under Vandevelde.
The store chain's managing director, Roger Holmes, was instructed three months ago by Vandevelde to review the whole company as the new management tries to turnaround the business.
M&S, which reported lower sales of clothing and general products in the nine weeks to March 24, said the restructuring will mean exceptional charges in 2001 of £250 million ($358 million) to £300 million, in addition to a £42 million charge already announced.
Vandevelde said the programme will take 12 to 18 months to accomplish and he was personally committed to seeing through the changes and expects to see the benefits in three years time. 
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