Struggling Jessops to cut 550 jobs

Struggling camera chain Jessops today announced plans to axe 550 jobs and close 81 stores in a bid to revive the store.

Three of the firm's Irish stores, located at Grafton Street, Dublin, Bloomfield Shopping Centre, Bangor and Arthur Square in Belfast are to close. Jessop's outlet in High St, Belfast will remain open.

Jessops said the cost-cutting drive came as the firm announced pre-tax losses of £25.2m for the six months to April 1.

The Leicester company has been suffering from heavy internet and supermarket competition in its key digital camera markets.

Jessops said the closure of 26% of the store portfolio would leave it with 234 profitable outlets. It said six stores had already closed, with another 19 at the end of their leases.

The company plans to develop its website, Jessops.com, and refocus the business on the growing digital printing and photo merchandising markets.

Jessops will also improve the layout of its existing stores with increased focus on higher margin photo gift and accessory sales.

The firm has agreed £66.5m in new banking facilities with HSBC until December 2008 to give Jessops a more secure financial platform.

Jessops said that the uncertainty surrounding the business had led to shortages of key products, meaning like-for-like sales were down 12.9% in the 12 weeks to June 17.

But the company added that it had been working closely with suppliers to improve supplies going into the summer period.

Chief executive Chris Langley said: “Our results show the extent of the tough market conditions we have faced in the past eight months and the severe price deflation affecting our market.”

Mr Langley added that the market “was likely to remain challenging”, but said the company would have a stronger platform for the future following the changes.