Travis Perkins, the builders’ merchant, is cutting 2,500 jobs in the UK, almost a 10th of its workforce, and closing 165 stores as it expects weaker demand for materials in the next two years in the wake of the Covid-19 pandemic.
The company is the UK’s largest distributor of building materials and owns a number of chains including the DIY retailer Wickes and Toolstation, with 2,154 branches around the country.
Travis Perkins has started a consultation of its staff on the job cuts and the branch closures, which will reduce its network by 8%. The job losses will also affect non-store roles in distribution, administrative and sales, and reduce its 30,000-strong workforce by 9%.
The branch closures will mostly affect the builders’ merchant businesses, in particular the Travis Perkins chain, focusing on small branches where it is difficult to implement physical-distancing rules, or where profits will be wiped out by lower trade.
Wickes, Toolstation, Tile Giant, BSS and the company’s other chains in the UK will also experience some closures, although its 66 Toolstation stores in the Netherlands, France and Belgium are unaffected.
Nick Roberts, the chief executive, said: “While we have experienced improving trends more recently, we do not expect a return to pre-Covid trading conditions for some time and consequently we have had to take the very difficult decision to begin consultations on the closure of selected branches and to reduce our workforce to ensure we can protect the group as a whole. This is in no way a reflection on those employees impacted and we will do everything we can to support them during this process.”
The company added in a statement: “It is evident that the UK is facing a recession and this will have a corresponding impact on the demand for building materials during 2020 and 2021.”
During the Covid-19 lockdown the group kept a third of its general builders merchant branches open, along with half of all plumbing and heating stores, to support essential construction, such as the seven temporary Nightingale hospitals, national infrastructure and emergency repairs at homes.
It has opened more of its branches over the last six weeks. Sales volumes were about 60% of last year’s levels in May and have improved to 85% to 90% of year-ago levels now, the company said.
Most of the Wickes and Toolstation branches have stayed open during the pandemic but the Wickes kitchen and bathroom design and installation service, which usually contributes about a third of Wickes’ sales, closed. As of Monday, all non-essential shops are allowed to reopen in England, subject to Covid-19 safety measures.
Travis Perkins has negotiated a relaxation of its covenants with its banks at the end of June and December, and has reduced its spending. It is benefiting from the government’s business rates holiday, which is saving it £90m a year.
About half of its staff – 15,000 people – were furloughed for the first three weeks of the lockdown on full pay. The Travis Perkins board and top management took a 20% pay cut from 1 May for three months.
