Burton Group considers cutting further 1,500 jobs

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The Independent Online
BURTON GROUP, the clothing retailer, is considering axing up to 1,500 jobs in an attempt to bear down on its mammoth wages bill. An announcement is expected within days.

The proposed cuts are thought to include about 1,000 jobs in the stores and distribution side. These are on top of the 500 head office job losses revealed in this weeks' Independent on Sunday and also follow 1,600 job cuts announced at the time of the 1991 emergency rights issue.

The planned cuts are believed to be across most of the group's retail outlets, which include Top Shop, Top Man, Evans, Principles, Dorothy Perkins and Debenhams. There is speculation that Top Shop, the women's fashion chain, which has narrowed its target customer from 15 to 30-year-olds to the 15-19 age range, may be particularly hard hit. Some outlets may be rebadged.

There may also be job cuts in the distribution arm. One theory is that Burton would like to contract out some of its distribution. If this is the case, some jobs may simply be transferred to the house distribution company, High Street Transport, which has depots in Leeds, Milton Keynes and Bedford.

Burton is one of the few clothing retailers with an in-house distribution arm. John Harvey, chairman of Tibbett & Britten, the distribution group, which handles transport for many larger retailers, said: 'They've not been in touch, but they would be a natural fit with us.'

Burton is expected to announce the cuts on or before the annual shareholders' meeting on 21 January, when it will also comment on its Christmas trading performance. It made no comment on either matter yesterday.

John Hoerner, the chief executive, is determined to cut the pounds 289m wage bill, which amounts to an uncomfortably high 18 per cent of total sales. That compares with 15.5 per cent for its rival Sears, 14 per cent at Storehouse and 9 per cent at Marks & Spencer.

Burton employs 36,000 people, including 18,000 part-timers, across the group's 1,800 stores. It has closed 235 shops in the past two years but has been constrained from slimming too far by the difficulty of selling its long leases.

Mr Hoerner, who is credited with turning around the Debenhams chain before he stepped up last year to head the entire group, hinted at further belt- tightening in the final sentence of his group review, published last month.

He wrote: 'With the emphasis on profits, not sales, some of the plans will tie in with the Blueprint programme (a rationalisation exercise begun in 1991) by calling for reductions in the company's exposure in certain areas.'

Yesterday Marks & Spencer reported satisfactory Christmas trade with strong demand in the three weeks to 2 January. The shares put on 8p to 333p as the news filtered out via its brokers, Cazenove.

M&S was pleased with sales of menswear, men's and women's tailoring, underwear, footwear, home furnishings and fresh food. However, childrenswear and packaged groceries are thought to have been disappointing.

Prodip Guha, deputy chairman of Littlewoods chain stores, said yesterday that Christmas trading had been 'steady but not spectacular'.

Littlewoods also announced a restructuring of the retail division into three separate operating subsidiaries.