900 jobs go amid bakery closures

HovisThe owner of Hovis has said it is to close two bakeries and cut 900 jobs as part of plans to overhaul the struggling bread business.

The biggest impact will be felt in Birmingham, where 511 jobs are to be lost with the closure of a factory and distribution operation. %VIRTUAL-SkimlinksPromo%

Hovis operations at Greenford, west London, will also close, costing 196 jobs, while the company's owner, Premier Foods, is also preparing to shut distribution sites at Plymouth and Mendlesham, Suffolk, resulting in the loss of 95 jobs in total.

The closures are subject to consultation with employees but are scheduled to take place during the course of 2013.

St Albans-based Premier, which also makes Mr Kipling cakes and Bisto gravy, has seen its Hovis division hit by intense competition in the bread market and a surge in wheat price inflation caused by poor weather.

It is also set to lose a £75 million-a-year contract with a major grocery chain from the middle of next year after Premier was unable to agree a new deal on sufficiently attractive terms.

It is cutting 130 distribution routes and closing the supply centres to take into account the expected reduction in volumes.

Premier chief executive Michael Clarke said: "We recognise the impact these actions will have for our employees at the sites affected.

"Decisions will not be taken lightly but they are necessary if we are to build a strong and successful future for the bread division and those who remain with our business."

7 PHOTOS
High Street casualties
See Gallery
900 jobs go amid bakery closures

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE


More stories

Read Full Story

FROM OUR PARTNERS