Discover Leisure closes more sites

CARAVAN retailer Discover Leisure is to close four more branches in an effort to cut costs and free up capital.

Branches in Orpington, Herne Bay, Portsmouth and Evesham will shut their doors for the final time today.

The recent closures of branches in Carlisle, Wrexham and Warrington takes the total number of closures to seven.

Discover, which bought Lancashire-based Barrons for £20m last year, said that the decision was part of a “fundamental strategy” of focusing its resources on larger and more profitable branches and business units.

As yet the number of redundancies is unclear, but Discover said it intended to preserve jobs where possible.

The company is also hoping to retain as many of its loyal customers as possible from the closed units by introducing them to other branches.

Trevor Parker, group chief executive, said that while it was never an easy decision to close branches and make staff redundant the board was committed to ensuring that the group was well placed to survive the economic downturn and take full advantage of a recovery.

“The branch closures will impact turnover in the second half of the year with the cost of the closures being taken as an exceptional item,” he said.

“However, the board believes that this programme will in due course reduce operating costs and the group’s funding requirements.”

He added that discussions with the group’s bankers on refinancing options after it breached banking covenants last month were still ongoing and “positive”.

In April, the firm was prompted to admit that despite a seasonal uplift in demand low consumer confidence made it “very difficult” to predict the outcome for the full year ending August 31, 2009.

Before the statement Discover saw its share price dive by more than 30%.
Statistics from the National Caravan Council indicated that demand for new tourers, motor homes and holiday homes had fallen much further behind last year’s figures.

Discover, which was floated on AIM in 2005, announced a £3.7m annual loss last year.

Its long term strategy is to lead consolidation and modernisation of caravan and motorhome retailing in the UK including seeking opportunities to sell outdoor leisure products from its branches and on the internet.

Discover employs more than 500 people across England and Wales including at branches in Delamere in Cheshire, and Chorley in Lancashire.