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WH Smith and M&Co to cut 1,900 jobs as Covid-19 hits sales

Jasper Jolly
·8-min read
<span>Photograph: Paul Marriott/Rex/Shutterstock</span>
Photograph: Paul Marriott/Rex/Shutterstock

WH Smith and the clothing chain M&Co are to make 1,900 workers redundant in further grim news for the UK retail sector as it struggles with the effects of the coronavirus pandemic.

WH Smith, whose products range from sandwiches to books, newspapers and stationery, will cut 1,500 jobs.

Related: Jobs blow as DW Sports and Hays Travel announcements affect 2,600

M&Co, the Renfrewshire-based fashion retailer previously known as Mackays, will close 47 shops as part of a pre-pack administration, leaving 215 shops open. The closures will cost just under 400 jobs, out of a total workforce of about 2,600.

The latest job cuts mark another day of thousands of job losses for the UK high street. In this week alone the travel agent Hays and the retailer DW Sports announced major job losses on Monday, followed by Pizza Express and the electronics retailer Dixons Carphone on Tuesday.

The high street is under particular pressure as it also struggles with shoppers’ rapid move online – a trend further encouraged by lockdown stay-at-home orders.

M&Co – 400 jobs
5 August: M&Co., the Renfrewshire-based clothing retailer, formerly known as Mackays, will close 47 of 215 stores.

WH Smith – 1,500 jobs
5 August: The chain, which sells products ranging from sandwiches to stationery, will cut jobs mainly in UK railway stations and airports. 

Pizza Express – 1,100 jobs
4 August: The restaurant chain plans the closure of 70 restaurants as part of a rescue restructure deal.

Dixons Carphone – 800 jobs
4 August: Electronics retailer Dixons Carphone is cutting 800 managers in its stores as it continues to reduce costs.

DW Sports – 1,700 jobs at risk
3 August: DW Sports fell into administration, closing its retail website immediately and risking the closure of its 150 gyms and shops.

Marks & Spencer – 950 jobs
20 July: The high street stalwart cuts management jobs in stores as well as head office roles related to property and store operations.

Ted Baker – 500 jobs
19 July: About 200 roles to go at the fashion retailer’s London headquarters, the Ugly Brown Building, and the remainder at stores.

Azzurri – 1,200 jobs
17 July: The owner of the Ask Italian and Zizzi pizza chains closes 75 restaurants and makes its Pod lunch business delivery only

Burberry – 500 jobs worldwide
15 July: Total includes 150 posts in UK head offices as luxury brand tries to slash costs by £55m after a slump in sales during the pandemic.

Boots – 4,000 jobs
9 July: Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.

John Lewis – 1,300 jobs
9 July: John Lewis announced that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.

Celtic Manor – 450 jobs
9 July: Bosses at the Celtic Collection in Newport, which staged golf's Ryder Cup in 2010 and the 2014 Nato Conference, said 450 of its 995 workers will lose their jobs.

Pret a Manger – 1,000 jobs
6 July: Pret a Manger is to permanently close 30 branches and could cut at least 1,000 jobs after suffering “significant operating losses” as a result of the Covid-19 lockdown

Casual Dining Group – 1,900 jobs
2 July: The owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains collapsed into administration, with the immediate loss of 1,900 jobs. The company said multiple offers were on the table for parts of the business but buyers did not want to acquire all the existing sites and 91 of its 250 outlets would remain permanently closed.

Arcadia – 500 jobs
1 July: Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said in July 500 head office jobs out of 2,500 would go in the coming weeks.

SSP Group – 5,000 jobs
1 July: The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, about half of its workforce, with cuts at its head office and across its UK operations after the pandemic stalled domestic and international travel.

Harrods – 700 jobs
1 July: The department store group is cutting one in seven of its 4,800 employees because of the “ongoing impacts” of the pandemic.

Harveys – 240 jobs
30 June: Administrators made 240 redundancies at the furniture chain Harveys, with more than 1,300 jobs at risk if a buyer cannot be found.

TM Lewin – 600 jobs
30 June: Shirtmaker TM Lewin closed all 66 of its outlets permanently, with the loss of about 600 jobs.

Monsoon Accessorize – 545 jobs
11 June: The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal in which 35 stores closed permanently and 545 jobs were lost.

Mulberry – 470 jobs
8 June: The luxury fashion and accessories brand is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

The Restaurant Group – 3,000 jobs
3 June: The owner of dining chains such as Wagamama and Frankie & Benny’s has closed most branches of Chiquito and all 11 of its Food & Fuel pubs, with another 120 restaurants to close permanently. Total job losses could reach 3,000.

Clarks – 900 jobs
21 May: Clarks plans to cut 900 office jobs worldwide as it grapples with the growth of online shoe shopping as well as the pandemic.

Oasis and Warehouse – 1,800 jobs
30 April: The fashion brands were bought out of administration by the restructuring firm Hilco in April, with all of their stores permanently closed and 1,800 jobs lost.

Cath Kidston – 900 jobs
21 April: More than 900 jobs were cut immediately at the retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores.

Debenhams – 4,000 jobs
9 April: At least 4,000 jobs will be lost at Debenhams in its head office and closed stores after its collapse into administration in April, for the second time in a year.

Laura Ashley – 2,700 jobs
17 March: Laura Ashley collapsed into administration, with 2,700 job losses, and said rescue talks had been thwarted by the pandemic.

However, the recent wave of job cuts comes as the government’s coronavirus job retention scheme begins to taper. On Saturday, employers using the scheme, which has supported furloughed workers’ pay, were required to start contributing to wages as the scheme starts to wind down. It ends entirely in October, which has raised fears of rapidly accelerating unemployment across the UK.

The bulk of the WH Smith job losses – about 15% of the company’s 14,000-strong global workforce – are expected to be in travel shops after a hoped-for recovery in sales did not materialise.

Revenues from WH Smith’s travel shops fell by 92% year on year at the peak of the UK’s lockdown in April and were still down by three-quarters in July even after restrictions eased. Across the group, revenues were still down by 57% in July compared with 2019.

WH Smith expects its travel businesses to continue to struggle, with the air industry not expecting a return to 2019 passenger numbers for years and companies across the UK still working from home. There have been broadly similar trends in its 153 stores outside the UK, the company said.

WH Smith has been gradually reopening stores, with just over half of its 580 travel shops trading and all 575 high street stores open.

WH Smith has not so far announced major store closures, unlike many other retailers, but it is understood that some 14 smaller, kiosk-style stores in bus and railway stations will close as part of the restructuring announced on Wednesday. The number of managers will also be cut, with managers put in charge of multiple stores each.

WH Smith expects to report a headline loss before tax for the financial year ending 31 August 2020 of between £70m and £75m.

Carl Cowling, the chief executive, said: “Covid-19 continues to have a significant impact on the WH Smith Group.

“In our travel business, while we are beginning to see early signs of recovery in some of our markets, the speed of recovery continues to be slow. At the same time, while there has been some progress in our high street business, it does continue to be adversely affected by low levels of footfall. As a result, we now need to take further action to reduce costs across our businesses.”

M&Co, owned by the McGeoch family, had also suffered a slump in sales because of the pandemic, despite also having a website. Sky News reported a £50m revenue shortfall.

Under the pre-pack administration, administrators sold the high street retail operation to another company owned by the McGeoch family. Andy McGeogh will continue to be chief executive.