Marks & Spencer is stepping up its retreat from the high street by closing a further 20 of its full-line stores, which sell clothing and food under one roof.

The retailer said it planned to close 72 of its big high street stores, on top of the 48 it has already shut. The company is battling the transfer of clothing sales online and it had previously told the City to expect about 100 closures.

M&S chief executive Steve Rowe said: “We can’t flinch from making the changes we need to make to modernise the business. We need to learn the lessons of the past and churn our store estate continually.”

The news of the extra branch closures – it is also shutting 25 of its smaller Simply Food convenience stores – came as the company pointed to “green shoots” of recovery, despite annual profits being pulled down by a £440m bill for a modernisation programme.

The 135-year-old mainstay of Britain’s shopping streets was starting to show signs of recovery, Rowe claimed, although fresh sales falls in clothing and food sales meant the UK business shed £170m of sales in the year to 30 March.

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Rowe said the store closure plan was still broadly in line with what had previously been announced, equating to a 25% reduction in the selling space devoted to its clothing and home ranges. Big changes in shopping behaviour mean a fifth of its clothing and homewares business has already moved online, it said.

With more than 1000 stores, including 75 that predate the second world war, M&S wants to axe all unprofitable stores as it seeks to avoid the fate of rivals such as Debenhams which was taken over by its lenders last month. Rowe said it wasn’t a one one way street as the group also has plans to open 95 mainly food stores over the next five years. “This is not just a closure programme,” he said.

The locations of the affected stores have not yet been disclosed.

Pretax profits were less than £85m – on sales of £10.4bn – after £440m of one-off costs, about half of which relate to the store closure programme.

In March M&S announced it was buying half of Ocado’s UK retail business for £750m, a tie-up that will result in Ocado stocking products from M&S rather than Waitrose from next year. It has now launched a £600m cash call to fund that deal.

Shareholders are being offered one new share for every five held, at 185p a share, a discount of about 30% on the current price of 264p. The rights issue is costing M&S £30m in advisers’ fees. The shares were the biggest faller in the FTSE-100, closing down nearly more than 9% at 247p. They are down nearly 60% on their 2015 level.

After almost two decades of failed attempts to revive the high street giant, Rowe and retail veteran Archie Norman, who joined as chairman in 2017, are the latest management team to try and reinvent the retailer. Their boldest step to date has been the new partnership with Ocado. M&S also said it is looking for larger food stores with car parks so it could sell a bigger range of groceries, extending its appeal beyond office workers to families.

“We continue to make good progress restoring the basics and fixing many of the legacy issues we face,” Rowe said. “While there are green shoots, we have not been consistent in our delivery in a number of areas of the business.”

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M&S admitted that despite improving the design of its clothing, the performance of its fashion arm had been hit by the most popular lines - such as those promoted by TV presenter Holly Willoughby - selling out because it had not bought enough stock. The retailer’s fashion sales have been falling for seven years.

Arlene Ewing, investment manager at Brewin Dolphin, said the rights issue and cut to the dividend meant short-term pain for investors. “These results underline that M&S is going through a significant overhaul. Of course, the hope is that a much stronger business will emerge on the other side – but we will only know whether it has worked years down the line.”