Johnson to axe 100 more drycleaning shops
JOHNSON Service Group, the North West listed company, is to close another large swathe of its drycleaning stores.
The AIM-listed Cheshire company, which says its annual results for 2014 will trump City forecasts, will shut 109 of its 307 branches in the first half of this year.
The closures follow a restructuring exercise in 2012 which saw a further 103 poorly-performing shops shut.
In a statement to the stock market the company said the closures would cost it around £6.5m, which will be taken as an exceptional item in the first half of this financial year. All are in locations where leases are expiring in the next two years and the company has deemed it would not be financially viable to renew them.
Johnson said: “Drycleaning continues to operate in a difficult high street environment and despite several initiatives to reach new customers the like-for-like sales increase we achieved in 2013 has not been maintained in 2014. Notwithstanding this we anticipate the result for 2014 to be in line with expectations.”
It added: ” We are commencing a consultation exercise with affected employees and anticipate that branches will close during the first half of the year.”
The company said its plan to focus on customer convenience was working, and a link up with upmarket retailer Waitrose was progressing “particularly well”. Around 80 Waitrose stores already offer collection and delivery and a further 46 locations are set to to be opened in the first quarter of this year.
In addition, Johnson has established collection and delivery points in office premises with a high concentration of staff, and will also launch an online home collection and delivery service for higher value or bulky items from mid 2015.
Aside from the difficulties in the drycleaning division, the Preston Brook-based company appears to be in good shape, thanks to its successful textile rentals division.
The results for 2014 will be “significantly ahead” of those reported in the previous year thanks to contribution of Bourne, a hotel linens specialist, acquired for more than £26m in March 2014
The group said its £8.2m investment in a new textile processing plant in Leeds is on schedule to be operational in early 2015 and will be the UK’s most automated garment processing plant.
