Marks & Spencer Cancels Dividend as Retailers Preserve Cash

(Bloomberg) -- Marks & Spencer Group Plc canceled its dividend and took measures to ensure it has enough credit available for the next 18 months as retailers prepare for the possibility that stores will never be the same again after Covid-19.

Withholding any dividend for fiscal 2021 will save 210 million pounds ($261 million), Marks & Spencer said Tuesday. Lenders also agreed to relax so-called covenant agreements on its debt through September 2021, giving the company easier access to loans.

Lockdowns have been another blow for Marks & Spencer’s ailing clothing business, which will force the retailer to depend even more on food.

Marks & Spencer said it will give investors an update on its transformation program and plans to change how it works permanently when reporting results May 20. In September, the retailer will have a multichannel food operation set up through its alliance with online grocer Ocado Plc.

©2020 Bloomberg L.P.

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