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Greggs To Shut Bakeries And Axe 355 Jobs

(c) Sky News 2016
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A man walks past a Greggs bakery in Bradford, Britain

A man walks past a Greggs bakery in Bradford, Britain March 1, 2016. Greggs plans to close three bakeries and cut up to 355 jobs as part of a 100-million-pound ($140 million) restructuring programme, the British baker announced on Tuesday. REUTERS/Phil Noble

Greggs (Stuttgart: 41G1.SG - news) is cutting up to 355 jobs as it shuts three of its bakery sites under a £100m restructuring plan.

The Newcastle-based chain, which has around 1,700 outlets in the UK, wants to expand to more than 2,000 but said to support this it needed to change its supply chain.

Greggs operates 12 bakery sites but said that "unfortunately not all are suitable for long-term investment due to their location and size".

It (Other OTC: ITGL - news) plans to close sites in Edinburgh, Twickenham and Sleaford in Lincolnshire - and to use the proceeds to expand capacity at its nine remaining sites.

Chief executive Roger Whiteside said: "These are difficult changes that we believe are needed to support the long-term growth of the business."

Mr Whiteside is two years into a five-year plan to transform the firm to take advantage of Britain's £6bn a year "food to go" market.

Shares (Berlin: DI6.BE - news) rose 14% following the announcement which came as Greggs reported a 25% rise in profits before exceptional items to £73m for the year to 2 January. Total (Swiss: FP.SW - news) sales climbed 5% to £835.7m.

Greggs highlighted particularly strong sales growth in sandwiches, new healthier ranges such as salads and no added sugar drinks. Soups and coffee also sold well.

Like-for-like sales increased 4.2% in the first eight weeks of its new financial year, recovering from a fourth-quarter dip, and the firm forecast another year of underlying growth.