Marks & Spencer receives funding to preserve liquidity during COVID-19 crisis
Marks & Spencer has completed the steps required to secure the necessary liquidity to see it through the likely duration of the COVID-19 crisis and to "underpin the recovery strategy and accelerated transformation in 2021".
The high street giant said an agreement had been reached with the lending syndicate of banks providing its £1.1bn revolving credit facility to "substantially relax or remove covenant conditions for the tests arising in September 2020, March 2021, and September 2021".
It is also an eligible issuer under the UK Government's Covid Corporate Financing Facility (CCFF), providing "significant further liquidity headroom".
Marks & Spencer said it was planning for its Clothing & Home businesses to be "severely constrained" during the lockdown period and for "highly uncertain trading conditions in a prolonged exit period".
All of its Clothing & Home stores are closed during lockdown, though in some food stores it has been able to include a limited number of essential items for sale, such as childrenswear, lingerie and leisure wear. It is still trading Clothing & Home online.
Unlike many other high street retailers it has food halls, which have been allowed to remain open, however the food business has been disrupted due to the closure of its cafes and some city centre outlets.
The company pointed to its forthcoming tie-up with online grocer Ocado later this year as a potential boost in trade but has said it will be outlining cost-saving measures when it releases its annual results and will not be paying a dividend this year to preserve further cash. The non-payment of the dividend would save around £210m it said.
Also at the results announcement, scheduled for 20 May, M&S said it would outline its transformation plan in more detail. It had already begun a right-sizing of its store estate and a move towards digital but it said the crisis had led to a "very different way" of working and rapid learnings.
"At the time of the results presentation we will also outline measures being taken to accelerate the transformation programme and change ways of working permanently under our 'never the same again' programme currently being prepared for implementation," it said.