Frasers Group to axe 300 jobs and introduce zero-hour contracts at bike brand

Evans Cycles, which os owned by Shirebrook-based Frasers Group, is to cut 300 jobs and switch its remaining retail staff onto zero-hour contracts in a bid to cut costs.

Evans, which has 55 stores across the UK, was bought out of administration by Frasers Group (then Sports Direct) in 2018, will lose half of its workforce in the move.

The Telegraph says that a document sent to staff shows that management staff hours will be increased from 40 to 45 a week, but that all other staff will be transferred from fixed-hours contracts, which usually guarantee eight hours a week, to “casual worker agreements” – or zero-hour terms.

A note to staff said: “We cannot rely on old ways of running our business and we must adapt. These changes will look to address the cost of sales ratio in our stores and ensure that we are able to be more flexible with our cost base out of peak trading and during difficult trading periods.”

Last week, Frasers Group warned that it was assessing its entire retail portfolio in response to the “near worthless support package for large retailers” unveiled by Chancellor Rishi Sunak in the Budget.

The company criticised Sunak’s business rates support which was announced last Wednesday (March 3).

The business rates holiday for non-essential retailers has been extended by three months to the end of June, which will be followed by a six-month transition where rates will only be one-third of their usual level.

However there was a £2m cap placed on the rates discount.

Frasers, which includes House of Fraser, Flannels, Game, and Evans Cycles in its portfolio, employs around 20,000 people in the UK.

The Mike Ashley-owned group has been one of the few retailers in acquisitive mood, having bought Sofa.com, Jack Wills, and part from DW Sport Fitness in the last two years.

In a statement Frasers said: “For Frasers Group this cap will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created. It will also mean we need to review our entire portfolio to ascertain stores that are unviable due to unrealistic business rates.

“Frasers Group believes that retailers should pay the fair amount of rates in line with realistic rateable values, but instead we continue to have an unwieldy, overly complex, and out of date business rates regime.”

The group wants the Chancellor to provide “suitable relief until structural reform is implemented”.

Danni Hewson, financial analyst at AJ Bell, said it was “understandable” the group had been publicly critical of the business rates regime.

She said: “Mike Ashley’s retail empire has a lot of skin in the game.

“It’s never disclosed exactly how much rates relief it’s received from the government during the pandemic but with 992 UK stores it must be sizeable.

“Like many retailers its clear Frasers had hoped the Chancellor would use the budget to finally address the much-discussed inequalities between online and bricks and mortar stores, but once again that can was kicked down the road.”