More jobs to go at Jessops
Like-for-like sales at the group were down by 4.5 per cent, a smaller drop than the 5 per cent seen in the comparable period last year. Gross margin declined to 28.1 per cent, with the retailer recording a loss before non-recurring items and tax of £5.9m.
Jessops has net liabilities of £26.8m and is in talks with lenders to restructure its finances. An internal programme to increase efficiency is also underway.
“In February of this year we undertook a restructuring programme in which we closed a further 21 stores, reducing the store estate to 211 stores, and reduced our Head Office staff by 50 people to 125,” states executive chairman David Adams in the retailer's financial overview. “We also identified that we needed to undertake a fundamental review of our store staff scheduling and then increase our investment in the sales training that we provide for our store colleagues. This will significantly increase our efficiency by replacing full time colleagues with part time colleagues so that our stores will be able to be fully staffed at our peak trading periods. It is, however, likely that this will result in a number of redundancies across our store estate. This programme commenced on 11 May and it is on track to be completed by the end of July.”
Adams adds: “Since my arrival at Jessops in 2007, the team has worked very hard in extremely challenging conditions to secure a successful future for the business. We have reduced costs wherever possible, worked closely with suppliers and explored a range of options to deliver a sustainable future for Jessops.
“In January we said that we were in discussions with our advisers and HSBC Bank and that it was highly likely that this exercise would involve a fundamental restructuring of our debt. These discussions continue. Regrettably however, against the backdrop of the challenging retail environment and the historic level of debt, the board believes that it is unlikely that any value will be attributed to shareholders. Nevertheless we are still working with HSBC towards a solvent solution for the business.”
In the eight weeks to 24 May Jessops saw like-for-like sales fall by 3.6 per cent, and total sales drop by 8.6 per cent, partly attributable to the store closure programme. The company says gross margin has improved
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