John Lewis to close several stores as Harrods
cuts 700 jobs
John Lewis staff unlikely to receive 2021 bonus
because of coronavirus crisis
Sarah
Butler
@whatbutlersaw
Wed 1 Jul
2020 12.27 BSTLast modified on Wed 1 Jul 2020 12.50 BST
Harrods
says ‘necessary social distancing requirements to protect employees and
customers is having a huge impact on our ability to trade’. Photograph: Hollie
Adams/Getty Images
John Lewis
has confirmed it is to close a number of its shops and Harrods is cutting 700
jobs as department stores reel from the coronavirus pandemic.
In a letter
to the retailer’s staff, the John Lewis chairman, Sharon White, also said the
store chain is to shut down a London office and will probably ditch the annual
bonus paid to all staff, which is regarded as a key part of the employee-owned
group’s culture.
Harrods has
told its staff that one in seven of its 4,800 staff would be affected by job
cuts because of the “ongoing impacts of this pandemic”.
In a note
to Harrods staff, the chief executive, Michael Ward, blamed the cuts on social
distancing and lack of tourists: “The necessary social-distancing requirements
to protect employees and customers is having a huge impact on our ability to
trade, while the devastation in international travel has meant we have lost key
customers coming to our store and frontline operations.”
Jobs in
parts of the store that remain closed, including beauty services and cafes, are
expected to be among those to go.
The John
Lewis chairman told staff the retailer was in talks with some of its landlords
about “ending some leases” and was trying to renegotiate the terms of some
others. White said the closures would mean job losses and also warned that the
group is highly unlikely to pay a bonus next year as it hoards cash.
White had
warned previously that John Lewis might not reopen all of its stores. However,
in a letter to staff first reported by the Evening Standard, she confirmed the
plans. The shops likely to close were not named.
The group,
which also owns the Waitrose chain, has reopened 22 of its 50 department stores
since non-essential retailers were given the green light to restart on 15 June.
Plans to open a further 10 were announced today, including Oxford Street in
London on 16 July. The group has confirmed that more outlets will reopen in
future. A handful are expected to be closed permanently.
In the
letter, White said: “The difficult reality is that we have too much store space
for the way people want to shop now. As difficult as it is, we now know that it
is highly unlikely that we will reopen all our John Lewis stores. Regrettably,
it is likely that there will implications for some [staff members’] jobs.”
John Lewis
said no final decision had been made and any details would be shared with staff
by the middle of July.
She said
that trade had not been as bad as feared but the company needed to act to
preserve cash as it expected trading to be tougher in the coming month. “There
is clearly a lot of uncertainty but as things stand, it is hard to see the
circumstances where we will be able to pay a bonus next year. I know this will
be a blow for partners who have made sacrifices these past months,” White
wrote.
 |
M Lewin
folds
At the
opposite end of the retail scale, shirt maker TM Lewin – a top 250 retailer in
the RXUK Top 500 – has also announced that it is withdrawing from the high
street, closing all 66 of its stores and moving operations online.
In a
statement, Resolve, which has been hired to restructure the retailer, said:
"This acquisition secured the future of the brand at a time of
unprecedented uncertainty within the retail sector. After considerable review,
and due to the many issues currently being experienced by high street
retailers, it has been determined that the future of the TM Lewin brand will be
online-only."
The shirt
makers assets have been sold to Torque Brands – and investment company set up
by Simba Sleep co-founder James Cox and backed by Allan Leighton, former Asda
CEO and Paul Taylor, who previously ran Harrods – in a pre-pack deal, which
doesn’t include the retailer’s stores.
TM Lewin
will be added to Torque’s growing stable of failing retail brands the company
is looking to purchase and roll out globally as online-only retailers. Torque
plans to take brands that have cache, but which are financially too insecure to
survive the COVID-19 crash, and run them more economically by using the same
IT, manufacturing and distribution systems to reap economies of scale.
A spokesman
for Torque says: “The decision to significantly reduce the scale of the
business in order to preserve its future will regrettably result in job losses
as a direct result of the closing of the store network as we right-size the
business."
Currently 650
of TM Lewin’s 700 staff are on the government-funded furlough. It is thought
some 600 will lose their jobs.
|
Harveys and TM Lewin fall into administration
with loss of 800 jobs
A further 1,300 jobs are at risk as more high street
chains succumb to Covid-19 pandemic
Tue 30 Jun
2020 16.47 BSTFirst published on Tue 30 Jun 2020 14.12 BST
Furniture
chain Harveys and shirt maker TM Lewin have both called in administrators on
another bleak day for UK retailers, with the immediate loss of more than 800
jobs and more than 1,300 others at risk.
The
collapse of the two familiar retail names is another blow for high streets
already reeling from the closure of a number of of Debenhams outlets and the
collapse of fashion retailers Cath Kidston, Laura Ashley, Oasis and Warehouse.
Scottish
retail chain M&Co, which employs 2,700 people at 262 stores, has appointed
advisers from Deloitte to consider options for the business, including a
possible sale via a pre-pack administration, as first reported by Sky News on
Tuesday.
Shirt maker
TM Lewin, which has not reopened any stores since the lockdown on “non
essential” retailers was lifted earlier this month, said all 66 of its outlets
would be permanently closing with the loss of about 600 jobs, after the group
called in administrators on Tuesday.
Administrators
from PwC are seeking a buyer for about 20 Harveys stores and its three
manufacturing sites. But 240 redundancies were made immediately at the chain
and more than 1,300 jobs may go if a buyer cannot be found.
All its
stores will continue to trade for now, but industry watchers believe a buyer is
unlikely to materialise. The retailer has been struggling for years and is also
heavily reliant on sister chain Bensons for Beds, with which it shares several
sites.
Bensons was
also put into administration on Tuesday. However, it has been bought out in a
prearranged deal by its private equity owner Alteri Investors, with the aim of
saving between 150 and 175 of the chain’s 242 stores, its Huntingdon
manufacturing operation, and nearly 1,900 jobs.
The buyout
involves new investment of £25m into Bensons by Alteri. All current Harveys and
Bensons orders will be honoured by the ongoing business.
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Zelf
Hussain, joint administrator at PwC, said: “The group had been facing
increasingly challenging trading conditions in recent months, in particular the
Harveys furniture business. This has resulted in cashflow pressures,
exacerbated by the effects of coronavirus on the supply chain and customer
sales. It has not been possible to secure further investment to continue to
trade the group in its current form.”
Harveys and
Bensons’ parent group appointed administrators from PwC on Tuesday morning
after a tough period of trading for furniture retailers, which were suffering
from a slowdown in the housing market and low consumer confidence even before
the government-imposed high street shutdown forced them to temporarily close
stores in March.
“The
restructuring, whilst obviously difficult for Harveys’ employees, will
safeguard more than half the group’s workforce and is a necessary milestone on
Bensons’ journey to becoming a market-leading beds retailer with a strong
omnichannel presence,” said Gavin George, the chief executive of Alteri.
“We will
continue to work closely with the management team on the turnaround of the
business which we believe can have a bright future, despite the challenges
facing the retail industry, including the long-term impact of the coronavirus
pandemic.”
Alteri bought
Harveys, which was founded in 1966, and Bensons, which has been in business for
70 years, in November last year.
TM Lewin
owner Stonebridge Private Equity, whose vehicle Torque Brands took over TM
Lewin in May, has bought back the brand’s remaining assets, including its
online business, in a pre-pack deal.
Stonebridge
said it had formed the view that TM Lewin was no longer a viable going concern
in its current format.
The group
did not reopen stores last month as the company said it relied on services such
as measuring which were not possible to deliver with physical distancing.
“The
business is unable to sustain current rental agreements for its store network
across the country. With all stores still remaining closed due to social
distancing guidelines, our customers have been unable to shop in store for the
past three-plus months; this has forced our hands to focus on a radical
overhaul of the business model, rebuilding from the ground up in a fashion we
deem fit for the years to come,” Torque said in a statement.
Thousands of job losses were announced in other
sectors too this week, including:
Up to 700
jobs at Harrods
About 600
workers at shirtmaker TM Lewin
Up to 900
jobs at management consulting firm Accenture
300 roles
at Virgin Money, Clydesdale Bank and Yorkshire Bank
1,700 UK
jobs at plane-maker Airbus
And 1,300
crew and 727 pilots at EasyJet
WH Smith,
Bensons for Beds, Wrights Pies, tableware-maker Steelite International, the
Adelphi Hotel in Liverpool and Norwich Theatre Royal have also announced plans
to reduce staff.
