Shake-up at Marks & Spencer will cost 4,400 jobs

Marks & Spencer, once the Britain's favourite retailer but now the poor relation on the high street, has unveiled the most radical shake-up in its 117-year history.

The company is planning to sell most of its wholly-owned overseas stores to concentrate on improving its struggling business in Britain.

The overhaul means 4,400 job losses, 1,000 of them in Britain.

All 38 branches owned by Marks & Spencer (M&S) in continental Europe will be closed, including flagship stores in Paris, Barcelona, Madrid and Cologne.

Brooks Brothers, a preppy American clothing chain bought by M&S in 1988, will be sold, as will Kings, its US supermarket group.

The loss-making M&S Direct catalogue will be closed, leading to 690 people losing their jobs in Warrington.

About 350 jobs will go at the group's Baker Street head office in London. But the bulk of the job cuts ­ 3,350 ­ will be on the Continent.

Luc Vandevelde, M&S's Belgian chairman and chief executive, said that the announcements were one of the most important in the history of Marks & Spencer.

"We are confident this will dramatically increase our chances of success and mark a return to our core values of quality, value, service, innovation and trust."

The move marks a U-turn in strategy by the company and Mr Vandevelde.

Only three years ago Sir Richard Greenbury, the previous M&S chairman, launched a £2 billion ($NZ7 billion) expansion programme around the world.

But trading soon collapsed, which led to the appointment of Mr Vandevelde a year ago.

M&S is keeping its 130 franchised stores, which operate mainly in the Middle East and central Europe.

- INDEPENDENT