Retail giant boohoo considering axing 100 staff at its London operation
Online retail giant, boohoo, is poised to axe up to 100 jobs at its London office.
The Manchester-based group is targeting staff in its e-commerce, buying and design departments.
The group is believed to have launched consultation talks with the affected staff last week, although a final decision on how many jobs could be lost is yet to be made.
Moves to switch staff from acquired brands, such as Burton, Dorothy Perkins, and Wallis, under the Debenhams.com brand are believed to be in train.
The group acquired the brands and associated intellectual property rights and not Debenhams’ retail stores, stock or any financial services, after the group, founded in 1778, announced in December 2020 it was going into liquidation.
In December 2021, boohoo opened the first physical Debenhams store, in Manchester Arndale, following the brand’s demise.
A boohoo spokesperson told TheBusinessDesk.com: “ To ensure long term, sustainable growth of our brands we have taken the difficult but necessary decision to consider a proposal to reduce the number of roles in specific areas of the business. Our people teams will be supporting those potentially affected.
“As a British retailer, we are proud to have secured the future of some of our industry’s most recognised brands, strategically accelerating our ambition to be a leader, not just in fashion eCommerce, but in new categories including beauty, sport and homeware.
“We are committed to our portfolio and believe that all of our brands have a significant role in the ongoing success of the group and are maximising their individual potential for growth.”
The review is linked to a plan to improve the operational performance, which was set out in the group’s half-year trading update on September 28, last year.
The interim report painted a gloomy picture for the retailer.
Half year profits plummeted by 90% and the group warned of lower revenues going into 2023 as the cost-of-living pressures continue to hamper demand.
Shares in the group also dropped nearly 10% in early trading to 32.8p.
The figures showed that the group, which was a beneficiary of the pandemic-induced boom in e-commerce, suffered a 10% decline in revenues from £975.9m to £882.4m.
Adjusted pre-tax profit plunged 90% to £6.2m. That was down from £63.8m for the same period in 2021.
Adjusted EBITDA also fell from last year’s £85.1m to £35.5m, which was a drop of 58%.
It reported a net debt of £10.4m compared with cash reserves of £98.4m the previous year and £207m for the same period in 2019.
And boohoo warned that, as a result of the impact that the macro-economic and consumer backdrop, had had on the group’s revenues in the first half, it was now expecting a similar rate of revenue declines “to persist over the remainder of the financial year if these conditions continue”.
