WH Smith is set to axe up to 1,500 jobs after a plunge in customers going into its stores during the coronavirus pandemic.
The high street retailer is the latest victim of Britain’s jobs bloodbath, with the number of workers facing redundancy as a result of the Covid crisis now above 100,000.
It comes as gambling giant William Hill reveals it is keeping 119 of its betting shops across the UK closed for good amid fears in-store customer levels will not return to pre-pandemic levels.
WH Smith said it needed to reduce costs as its shops in airports and train stations are hit by low passenger numbers and its high street stores also suffer from low footfall.
WH Smith is set to axe up to 1,500 jobs after a plunge in customers going into its stores during the coronavirus pandemic
Just over half of its UK travel shops have reopened and 246 of its largest sites have started trading again.
All of its 575 high-street stores have opened, the business said, but footfall is strongly down compared to last year.
Revenue was 57 per cent lower last month compared to July 2019, even as sites started to welcome customers back, with most of this loss coming from the travel arm.
‘We now need to take further action to reduce costs across our businesses,’ said chief executive Carl Cowling.
‘I regret that this will have an impact on a significant number of colleagues whose roles will be affected by these necessary actions and we will do everything we can to support them at this challenging time.’
The company said it now expects to make a loss of between £70 million and £75 million for the year to August.
Although travel revenue has started to recover from April, when it was down 92 per cent on last year, sales were still nearly three-quarters lower in July.
The high street business, meanwhile, has gone from 71 per cent down in April to 25 per cent down in July compared with the same months in 2019.
The US arm should recover quicker, the company said, as most flyers travel domestically.
Revenue in the travel business there is down 80 per cent, but the 147 open stores are seeing an ‘encouraging performance,’ WH Smith said.
Mr Cowling added: ‘Covid-19 continues to have a significant impact on the WH Smith Group.
‘Throughout the pandemic, we have responded quickly and taken decisive actions to protect the business, including substantially strengthening our financial position.
‘We have also welcomed support from Government where available.’
Meanwhile, William Hill’s continued closures mean less than 20 people facing job losses, with around 300 set to be deployed to other sites within the company.
The closures will leave the betting firm with over 1,414 stores across the UK. William Hill has not yet revealed the location of the 119 sites staying shut.
A spokesperson for William Hill told This is Money: ‘We are very comfortable with the scale and performance of our retail estate; we think we have got the balance right.
‘But we will always look at performance as leases are up for renewal. This is just part of normal business practice.’
The company’s management also announced today that it will be repaying the £24.5million received from the Government as part of the coronavirus job retention scheme.
Pizza Express was among the big names to announce cuts yesterday, as bosses revealed they could shut 67 of its UK restaurants with up to 1,100 jobs at risk.
The 55-year-old company, owned by Chinese private equity firm Hony Capital, has debts of £735million and has put itself up for sale after bringing in experts.
Bosses at the chain said they wanted to push down rents by closing about 15 per cent of its 449 restaurants in the UK, which would help protect 9,000 jobs.
The news came as Currys PC World owner Dixons Carphone also announced today that it is to cut 800 jobs as part of an overhaul of its store management structure.
And it emerged on the second day of the Government’s Eat Out to Help Out scheme, which Pizza Express signed up to, giving diners 50 per cent off meals out on Mondays to Wednesdays throughout August to help beleaguered restaurants.
The chain said it was launched a major restructuring plan and is planning a company voluntary arrangement (CVA) in the ‘near future’ in a bid to push down its rents amid a ‘significantly more challenging environment’ after the coronavirus pandemic.
The outcome has ‘yet to be decided’, Pizza Express said, but it may end in the closure of around 15 per cent of its 449 restaurants in the UK, affecting 1,100 staff.
The locations of the 67 restaurants have not yet been revealed. Pizza Express said it has also hired advisers from Lazard to lead a sale process for the business.
The company added: ‘This decision is a very difficult one; however, against the current unprecedented backdrop, Pizza Express believes reducing the size of its estate will help it to protect 9,000 jobs.’
Pizza Express also said it had put itself up for sale after bringing in experts. The sale will be run independently to its other plans and was started today, it revealed.
Julian Cox, partner and employment law specialist BLM, said: ‘Pizza Express is yet another household name that has been pushed to the brink by COVID-19, with the hospitality sector hit particularly hard.
‘Whilst the Government has attempted to encourage people through the doors with ‘Eat Out to Help Out’, the initiative is clearly not going to be enough to protect the sector in the long term.
‘As we’ve seen from local infection spikes, this pandemic is far from over and further support is needed for the months ahead.
‘Whilst the Chancellor has previously suggested that the October end date for the scheme is final, many impacted businesses will surely be asking whether this will go far enough to stave off financial ruin.’
Meanwhile Currys PC World said its shake-up will see it create a ‘flatter management structure’ as it adapts to increasing online sales.
Gambling giant William Hill says it is keeping 119 of its betting shops across the UK closed for good amid fears in-store customer levels will not return to pre-pandemic levels
Dixons Carphone said it will remove retail manager, assistant manager and team leader roles, introducing new sales manager, customer experience manager and operational excellence manager positions in stores.
The group said it will also create opportunities for staff to join its ShopLive personal shopping service, where customers are advised by sales staff from home via video-link.
Last Friday, business leaders warned that Boris Johnson postponing a further easing of England’s coronavirus lockdown was a ‘hammer blow’ to the economy.
The British Chambers of Commerce said businesses and consumer confidence will be damaged again after the Prime Minister warned the UK ‘cannot be complacent’ amid a rise in the Covid-19’s prevalance in communities.
BCC co-executive director Claire Walker said: ‘While tackling the public health emergency must be the priority, these announcements – made at short notice – will be a hammer blow to business and consumer confidence at a time when many firms were just starting to get back on their feet.
‘Businesses communities need as much clarity as possible from government if they are to plan ahead and rebuild their operations in the coming months.
‘Ministers must also consider extending support to all firms, many of whom will be forced to close for an even more prolonged period, as well as targeted measures to help businesses placed under localised lockdowns.’
Also last Friday, Matthew Fell, the Confederation of British Industry’s chief UK policy director, said: ‘This news will come as a real disappointment for some businesses, but firms know that public safety comes first. Businesses will continue to do what is necessary to avoid an infection spike.
‘Delayed reopening will unfortunately lead to even more financial pressure for some companies. So there may yet be a need for more direct support to shore up cash flow, including extended business rates relief.’