Littlewoods to cut about 3,200 jobs
Littlewoods will sell 33 of the shops to the Argos unit of GUS, Britain’s second-largest retailer by market value, for £44 million (€64m), the Liverpool-based company said yesterday. Those stores employ about 800 of Index’s 4,000 personnel. The rest of Index will be closed.
“Index has made a loss in nearly every year of its 20-year history and has accumulated losses of over £100 million despite many attempts by different management teams to turn the business around,” said chairman David Simons. “The decision to divest the business hasn’t been an easy one to make, but it is the only solution.”
The billionaire Barclay brothers, who also own London’s Ritz hotel, are shutting Index as they seek to sell 120 Littlewoods branded stores. Littlewoods is Britain’s largest mail-order retailer, and the twin brothers, aged 70, want to focus the company on its catalogue and on-line business. Potential acquirers for the Littlewoods stores include Primark, a unit of Associated British Foods, and grocery chain. The Barclays bought Littlewoods for £750m from its founders.
The announcement of the job cuts at Index comes just two days after MG Rover Group said it planned to fire about 5,000 workers as the Shanghai Automotive Industry Corporation scrapped takeover talks and left the insolvent company near collapse. The news comes less than three weeks before a British general election The Index stores are being sold and shut now because the Barclays decided they had spent long enough trying to turn them around, said Susan Gilchrist, an external spokeswoman for Littlewoods.
“It’s clear that it’s not going to be turned around,” said Ms Gilchrist.
“It really lacks the scale and the brand power that Argos has.”
Argos has about 592 stores that sell everything from furniture to jewellery.
Sales at Argos dropped 1% in the fiscal fourth quarter ending March 31, the first decline in six years.
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