Selfridges to cut 450 jobs as Covid-19 causes 'toughest year'

Redundancies at department store chain follow 700 job losses at Harrods this month

Selfridges is to cut 450 jobs across its department stores, in the latest blow to UK high street retailers hit hard by the coronavirus pandemic.

The cuts represent 14% of its workforce and Anne Pitcher, group managing director, said it was the “toughest decision we have ever had to take”. Selfridges operates four department stores in the UK including its London flagship on Oxford Street, as well as a website.

The forced closure of non-essential retail stores during lockdown accelerated the growth of online shopping – a trend retailers expect to persist. People are also proving reluctant to resume their old lives with the number of those visiting high streets and shopping centres down sharply on a year ago. The absence of tourists, particularly in London’s main shopping district, is also hitting retailers hard.

“How we work, shop and socialise is changing,” said Pitcher. “Our high streets were changing rapidly before Covid-19 arrived. However the speed and magnitude of what is happening right now, and the impact on trading means, we must make some more fundamental changes to our organisation.” Selfridges online sales doubled during the lockdown and it plans to step up investment in its site.

The move follows 700 job losses at its rival Harrods which were announced earlier this month. At the time the Harrods chief executive, Michael Ward, blamed the cuts on physical distancing requirements and a lack of tourists visiting the UK.

Pitcher said 2020 looked likely to be the “toughest year” in the recent history of the 114-year-old business, which been owned by the British Canadian billionaire Galen Weston since 2003 and chaired by his daughter, Alannah Weston.

“Like many others, we are feeling the effects and acknowledge that recovery will be slow, with sales this year forecast to be significantly less than they were in 2019,” Pitcher said.

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Selfridges said it had begun a consultation period with staff during which those who wished to be considered for voluntary redundancy could come forward. Other options on offer include reducing working hours or taking a career break.

Until the upheaval created by the coronavirus, upmarket stores such as Selfridges and Harrods were prospering as customers sought out designer fashion as well as experiences beyond shopping, such as pop-up theatres and restaurants, in their stores.

Their experience contrasts with that of mid-market department store rivals such as John Lewis, Debenhams and House of Fraser, which have hit trouble as sales moved online and the cost of running big shops, with their hefty rent bills, continued to rise.

John Lewis recently announced plans to close eight of its 50 stores, including full department stores in Birmingham and Watford, while Debenhams has put itself up for sale to avoid going into liquidation.

Debenhams, which called in administrators in April, has appointed investment bank Lazard to oversee the sale process and hopes to secure a buyer before the end of September.


Zoe Wood

The GuardianTramp

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