Marks & Spencer is to step up store closures after diving £200m into the red and as clothing and homeware sales slumped by almost a third during the high street lockdowns. Food sales rose by only 1.3% at established stores in the year to 3 April, a slower pace than many rivals, as M&S missed out on the shift to online groceries for most of the year until it launched a delivery service with the specialist Ocado in September. Sales were also affected by the closure of the retailer’s cafes and a decline in the demand for takeaway food such as sandwiches with many people working from home. The company plans to increase its capacity to sell groceries online by 50% over the next 18 months as its products now make up more than a quarter of the average order on Ocado. Online sales of clothing and homewares soared by almost 54% but that was not enough to offset the 56% slump in high street sales because most stores were unable tooperate normally as part of efforts to control the spread of Covid-19. The group’s full-year pre-tax loss of £201.2m included £117m of restructuring costs and £95m to cover the cost of store closures. The previous year M&S made a profit of just over £67m. The full year loss was despite M&S benefiting from £175m in business rates relief and £131.5m in furlough payments from the government. Steve Rowe, the chief executive, described the results as resilient “in a year like no other ”. He said the group had fixed the basics and would now “accelerate change in the trading businesses and build a trajectory for future growth”. He added: “We now have a clear line of sight on the path to make M&S special again. The transformation has moved to the next phase.” In the most recent six weeks, when non-essential stores have reopened across the UK, M&S said overall trading had been better than 2019, before the pandemic. Clothing and homewares and core food categories, excluding cafes and stores in travel locations, have all seen growth. Archie Norman, the chairman, said M&S was “emerging from the chrysalis of Covid as a reshaped business”. He said: “For the first time in three and a half years there is a lot to feel confident about and enough green shoots and points of light to say M&S is on the verge of becoming a growing business again.” Shares in M&S rose 8.5% to 169.2p on hopes that the company had turned a corner. That is still substantially down on the 415p they were changing hands at five years ago, but double the 85p they were changing hands at last May. However, Rowe cautioned that, while the latest sales figures were encouraging, “it is unclear how the recovery will develop and if consumer activity will sustain in clothing and home as well as what the eventual pace and shape of recovery in hospitality and convenience in food will be”. He said M&S was stepping up its plan to close outdated stores to create a chain of 180 clothing and homewares sites around the country over the next decade, down from 254 at present. Three years ago M&S said it would close or relocate 110 main stores. The new plan extends that to 90 closures, including 59 already shut, alongside more than 45 conversions to food only and 35 relocations. Some of the closed stores will be converted into homes or other uses, generating at least £200m in funds to invest in new or improved stores and help cover the £260m cost of store closures. About 17 new or expanded full-line stores will open over the next two years, including at least six in former Debenhams sites. Rowe said online shopping was now expected to account for about 40% of sales of fashion and homewares in future, up from about 20% before the pandemic.