Wickes owner Travis Perkins to close 165 stores and cut 2,500 jobs - here’s what you need to know
Travis Perkins, the UK's biggest builders’ merchant, is set to close 165 branches and cut around 2,500 jobs.
The group, which includes Wickes, Toolstation and Tile Giant said that it had started a consultation process with staff, and will cut about 9% of its workforce.
Why is the merchant cutting jobs?
The group explains that it expected a UK recession to have “a corresponding impact on the demand for building materials” both this year and in 2021.
Figures that came out last week revealed that the UK economy had shrunk more than 20 per cent in April, when the country was in its first full month of lockdown.
Travis Perkins explained that the coronavirus crisis had "created significant challenges across our group".
The group's sales volumes dropped 40 per cent in May year-on-year.
However, it has since recovered to about 85 per cent to 90 per cent of last year's levels as more branches have reopened with social distancing measures in place.
Are Travis Perkins staff furloughed?
Travis Perkins has been using the furlough scheme, with around half of its staff - 15,000 people - furloughed for the first three weeks of the lockdown on full pay.
The Travis Perkins board and top management also took a 20 per cent pay cut from 1 May for three months.
The group has negotiated a relaxation of its covenants with its banks at the end of June and December, alongside reducing its spending.
It is also benefiting from the government’s business rates holiday, which is saving the group £90m a year.
Most of the Wickes and Toolstation branches have stayed open during the pandemic. However, the Wickes kitchen and bathroom design and installation service, which usually contributes to about a third of Wickes’ sales, closed.
Treasury figures last week showed that more than a quarter of UK workers are currently furloughed, with the government paying 80 per cent of staff salaries.
From August to October, workers on furlough will continue to receive 80 per cent of their salary, but the amount paid by the state will be reduced each month, with employers expected to make up the rest.
Which branches are set to close?
The group said closures would mainly be of smaller branches of its Travis Perkins General Merchant brand, but has not yet stated which stores will be closing.
The firm has 2,000 stores, with numerous in Yorkshire, including Leeds, Wakefield, Barnsley, Doncaster and three in Sheffield.
Almost a 10th of its workforce is set to lose jobs, with 165 stores due to close.
Chief executive Nick Roberts said: "While we have experienced improving trends more recently, we do not expect a return to pre-Covid trading conditions for some time and consequently we have had to take the very difficult decision to begin consultations on the closure of selected branches and to reduce our workforce to ensure we can protect the group as a whole.
“This is in no way a reflection on those employees impacted and we will do everything we can to support them during this process.”