M&S kicks off £700m overhaul with Oxford Street revamp

Marks & Spencer has opened its revamped Pantheon store on Oxford Street, marking the first step in a £700m investment strategy designed to modernise its 200 largest UK shops.

The 88-year-old outlet now serves as the physical template for chief executive Stuart Machin’s broader turnaround plan. After years of stalled revivals, M&S is attempting a structural shift: shrinking its traditional full-line footprint while aggressively expanding its food halls and overhauling its supply chain.

The push comes after a difficult year. A cyber-attack wiped out online trading for nearly seven weeks and stripped more than £300m from profits, leaving underlying pre-tax profits at £671m. Yet Machin told shareholders the coming three years are "critical for M&S as we invest for growth."

He explicitly stated that returning to a £1bn profit target is not the objective. "Profit will be what it will be," he told the Guardian. "Our plan is for a growth business."

The strategy requires a painful rationalisation of the retailer's property portfolio. M&S currently operates 227 full-line stores but aims to reduce that number to 200 over the next two years. The next major phase involves demolishing its profitable but aging Marble Arch store next year to build a 10-storey mixed-use site. That project required housing secretary Angela Rayner's approval in 2024 following a legal challenge over its environmental impact.

While closing large shops, M&S is opening 18 food-only outlets this year, targeting 420 directly operated stores compared to 335 today. It is currently the fastest-growing food retailer in the UK, with sales up 16% and market share at an all-time high of 4.1%.

In clothing, M&S has seized the top spot for style perception from Zara, holding more than 10% of the UK fashion market. The brand is successfully drawing younger consumers, forcing it to buy more stock in smaller womenswear sizes. "We know we’ve got a big job modernising the store experience," Machin said.

The recovery still carries significant risks. Former executives warn that decades of lost womenswear market share are gone forever. Furthermore, international operations remain sluggish, and the 2019 acquisition of a 50% stake in Ocado's retail arm is described by insiders as largely unprofitable.

Machin’s ultimate test will be executing massive warehouse projects planned for south-west England and the Midlands. Without this upgraded logistical backbone, the new storefronts will struggle to sustain the momentum needed to break M&S’s historical cycle of short-lived recoveries.