dinp
April 18th, 2005, 07:34 PM
Littlewoods to slash 3,200 jobs
Slowing consumer spending has put pressure on High Street retailers
UK retail group Littlewoods will cut up to 3,200 jobs as part of plans to shut 126 of its Index catalogue-based shops.
Littlewoods is also selling the remaining 33 shops in the Index estate to retail giant GUS, which will convert them into Argos stores.
Sir Frederick and Sir David Barclay bought the Liverpool-based business for £750m in 2002.
Littlewoods said the Index stores had accumulated losses of more than £100m over two decades of operation.
The latest closures follow the demise of Allders and The Gadget Shop, hit by the slowdown in consumer spending.
Heavy losses
Littlewoods is owned by the Barclay brothers, the twin tycoons who also own the Telegraph newspapers and the Ritz Hotel.
Index, its catalogue arm, has seen trade squeezed by Matalan, TK Maxx, and Argos.
"We don't have the buying power to compete with Argos," said David Boardman of Littlewoods on Monday.
"Index has not made a profit in 18 of its 20 years. That is not sustainable and action had to be taken. It is a very difficult situation that has to be dealt with."
Littlewoods said 50% of its 66 stand-alone Index stores would be closed within the next six months. The rest will be sold off to GUS for £44m.
Index has made a loss in nearly every year of its 20-year history
David Simons, chairman
A further 93 Index stores located inside Littlewoods outlets will be closed, with the floor space retained by Littlewoods.
Index employs a total of 4,000 staff, and about 800 of them will be transferred to Argos, which is owned by GUS.
GUS said it planned to convert the 33 sites into Argos stores within three months of finalising the deal.
Littlewoods refused to specify which stores were being shut down and which sold off until after staff had been informed.
However, the company said at least 350 jobs at its distribution centre in Moxley, West Midlands and 170 posts at its Liverpool head office were likely to go.
'Devastating'
Union officials said the decision had come completely out of the blue.
LITTLEWOODS HISTORY
1923 - Littlewoods Pools founded by the late Sir John Moores
1937 - first Littlewoods store opened in Blackpool
1985 - first Index store opened
1995 - Index Extra launched, Littlewoods' first direct catalogue store
1999 Littlewoods Leisure sold to Rodime for £161m
2002 - LW Investments buys Littlewoods from the Moores family for £750m
"Our members who have contributed to the success of this company have been left reeling and utterly shocked by this devastating news," said John Gorle, of shopworkers' union Usdaw.
"This is a bolt from the blue, we were aware of the difficult trading position and were expecting an announcement but nothing like this."
He said various management plans to turn around the business had not been successful.
Usdaw said it would urge Littlewoods to redeploy as many staff as possible into other parts of the group.
Now the Index sites are facing closure, speculation is mounting that the Barclay brothers are poised to sell the 119-strong Littlewoods stores chain.
Discount clothing retailer Primark has been tipped as a potential bidder.
Slowing consumer spending has put pressure on High Street retailers
UK retail group Littlewoods will cut up to 3,200 jobs as part of plans to shut 126 of its Index catalogue-based shops.
Littlewoods is also selling the remaining 33 shops in the Index estate to retail giant GUS, which will convert them into Argos stores.
Sir Frederick and Sir David Barclay bought the Liverpool-based business for £750m in 2002.
Littlewoods said the Index stores had accumulated losses of more than £100m over two decades of operation.
The latest closures follow the demise of Allders and The Gadget Shop, hit by the slowdown in consumer spending.
Heavy losses
Littlewoods is owned by the Barclay brothers, the twin tycoons who also own the Telegraph newspapers and the Ritz Hotel.
Index, its catalogue arm, has seen trade squeezed by Matalan, TK Maxx, and Argos.
"We don't have the buying power to compete with Argos," said David Boardman of Littlewoods on Monday.
"Index has not made a profit in 18 of its 20 years. That is not sustainable and action had to be taken. It is a very difficult situation that has to be dealt with."
Littlewoods said 50% of its 66 stand-alone Index stores would be closed within the next six months. The rest will be sold off to GUS for £44m.
Index has made a loss in nearly every year of its 20-year history
David Simons, chairman
A further 93 Index stores located inside Littlewoods outlets will be closed, with the floor space retained by Littlewoods.
Index employs a total of 4,000 staff, and about 800 of them will be transferred to Argos, which is owned by GUS.
GUS said it planned to convert the 33 sites into Argos stores within three months of finalising the deal.
Littlewoods refused to specify which stores were being shut down and which sold off until after staff had been informed.
However, the company said at least 350 jobs at its distribution centre in Moxley, West Midlands and 170 posts at its Liverpool head office were likely to go.
'Devastating'
Union officials said the decision had come completely out of the blue.
LITTLEWOODS HISTORY
1923 - Littlewoods Pools founded by the late Sir John Moores
1937 - first Littlewoods store opened in Blackpool
1985 - first Index store opened
1995 - Index Extra launched, Littlewoods' first direct catalogue store
1999 Littlewoods Leisure sold to Rodime for £161m
2002 - LW Investments buys Littlewoods from the Moores family for £750m
"Our members who have contributed to the success of this company have been left reeling and utterly shocked by this devastating news," said John Gorle, of shopworkers' union Usdaw.
"This is a bolt from the blue, we were aware of the difficult trading position and were expecting an announcement but nothing like this."
He said various management plans to turn around the business had not been successful.
Usdaw said it would urge Littlewoods to redeploy as many staff as possible into other parts of the group.
Now the Index sites are facing closure, speculation is mounting that the Barclay brothers are poised to sell the 119-strong Littlewoods stores chain.
Discount clothing retailer Primark has been tipped as a potential bidder.