Travis Perkins announces COVID restructuring measures

Travis Perkins has announced job cuts and branch closures in reaction to lower numbers of customers during the ongoing COVID-19 crisis.

Group volumes in May were around 60% of prior year, with an improving trend throughout the month. The group’s weekly volume run rate is now around 85-90% of prior year, with particular strength in Wickes’ core DIY ranges and in Toolstation, it said, with both those businesses demonstrating improving like-for-like growth versus 2019. Those performances were underpinned by their strong digital capabilities.

The group’s general merchanting business was operating well, whereas trading in plumbing and heating was recovering more slowly as a greater proportion of plumbing work required tradespeople to work in people’s homes, a statement noted.

“While there has been a significant recovery in trading volumes in recent weeks, 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,” the statement added.

The group said it was taking regrettable but necessary actions to “preserve the future competitiveness of the business”.

This included the proposed closure of around 165 branches across the overall branch estate, which was expected to reduce the number of colleagues by around 2,500 or approximately 9% of the workforce.

Branch closures will be concentrated in the merchant businesses, in particular the Travis Perkins General Merchant, focusing on small branches where it was difficult to implement safe distancing practices.

Nick Roberts, Travis Perkins chief executive, said: “The COVID pandemic has created significant challenges across our group and I have been hugely encouraged by the flexibility of our colleagues to adapt our business models successfully and at pace, which has enabled us to maintain safe working practices whilst continuing to provide an effective service to our customers.

“Whilst 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 group has a robust balance sheet, strong liquidity position and I am confident that these proposed changes will enable us to trade successfully through this period of uncertainty with a cost base that better reflects the environment we are operating in.”