Selfridges plans ‘fundamental’ changes as it cuts 450 jobs

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Upmarket UK department store chain Selfridges is to cut 450 jobs as part of “fundamental changes” to its business in response to the rapid reshaping of the retail industry caused by the coronavirus pandemic.

The group warned that this year will be the “toughest” in its recent history and expects sales to fall significantly. It said it was leaving “no stone unturned” in planning for changes to consumer behaviour that have been accelerated by the Covid-19 crisis as shoppers abandon the high street and turn online in increasing numbers.

“How we work, shop and socialise is changing,” managing director Anne Pitcher said in a message to staff on Tuesday.

Selfridges is known for its flagship store on Oxford Street in central London, but Ms Pitcher said the business will invest in its online platform and customer experiences as footfall and tourist numbers in major city centres have collapsed.

Traditional bricks and mortar shops had already been suffering against competition from nimbler online retailers with lower fixed costs before lockdown measures left people unable to visit non-essential shops for three months earlier this year.

“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 to stay ahead and realise a more sustainable future,” Ms Pitcher said.

Selfridges has begun a consultation process to cut around 450 jobs, or 14 per cent of its total workforce.

The retail sector has been particularly badly hit by the pandemic, and Selfridges has become the latest in a long list of companies outlining plans to shed staff. Earlier this month luxury fashion group Burberry said it would cut staff as tourist numbers were likely to remain “negligible”, while Boots and John Lewis are to shed thousands of staff and shut stores.

The government is looking at ways to help prop up Britain’s ailing high streets, and is considering a new sales tax on online retailers to help lure people back into physical stores. The Treasury is looking at the possible tax as part of a review of business rates launched by chancellor Rishi Sunak, the FT reported this week.

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