// Travis Perkins announces 2500 redundancies through the closure of 165 stores
// The store closures will focus on smaller Travis Perkins sites
// Bosses made the move ahead of forecasts of a recession that could take two years to recover from
Around 2500 workers are set to lose their jobs at builders’ merchant and hardware retailer Travis Perkins amid plans to shut down 165 stores.
The company, which also owns DIY chains Toolstation and Wickes, said the decision comes as it expects a recession to hit the sector for at least two years.
Bosses said the plans to close down 165 stores will mainly focus on smaller Travis Perkins sites.
- Wickes stores set for phased reopening starting this week
- Wickes owner Travis Perkins hit by 2/3 fall in sales in April
However, they also said there were encouraging signs that building work is returning now that the UK is gradually coming out of lockdown.
“Whilst 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,” Travis Perkins chief executive Nick Roberts said.
“This is in no way a reflection on those employees impacted and we will do everything we can to support them during this process.”
An increasing number of businesses across various sectors are concerned that an impending recession will be the harshest in living memory and will take years to recover from.
Economists and experts also predict the unemployment rate could return to levels not seen since the 1980s.
“While there has been a significant recovery in trading volumes in recent weeks, it is evident that the UK is facing a recession and this will have a corresponding impact on the demand for building materials during 2020 and 2021,” Travis Perkins stated.
The company added that the redundancies make up around nine per cent of its total workforce, with the store closures reducing its portfolio by eight per cent.
“Branch closures will be concentrated in the Merchant businesses, in particular the Travis Perkins General Merchant, focusing on small branches where it is either difficult to implement safe distancing practices, or where marginal profitability will be eroded in a reduced volume environment,” Travis Perkins said.
It added that over the past six weeks more and more branches have been reopening, after DIY stores were deemed “essential” and allowed to remain open during lockdown.
Sales were down 40 per cent in May compared with the same month a year ago, but there have been strong sales in Wickes and Toolstation as households stuck indoors turn their hands to DIY or renovations.
Travis Perkis said its general merchanting business is operating well, with builders returning to homes to continue or start new residential jobs following a relaxing of rules on going back to work.
However, it added that plumbing and heating was “recovering more slowly as a greater proportion of plumbing work requires tradesmen to work in people’s homes”.
At the end of last week, Travis Perkins had cash deposits of £363 million alongside an undrawn overdraft of £400 million with its banks.
with PA Wires