Travis Perkins, Britain’s biggest builders' merchant and the owner of the DIY chain Wickes, has announced plans to shut stores amid ‘uncertain trading’ in a move impacting up to 600 jobs across the group.
The company, which employs 28,000 people and has 2,060 stores, is closing 10 distribution and fabrication centres, and 30 branches across its business, having suffered a fall in sales of plumbing and heating products as well as lack of demand following the Brexit vote.
John Carter, chief executive, said: “It is still too early to predict customer demand in 2017 with certainty and we will continue to monitor our lead indicators closely."
“Given this uncertainty we will be closing over 30 branches and making further efficiency-driven changes in the supply chain, resulting in an exceptional charge of £40-50 million this year.”
Travis Perkins was one of the biggest fallers on the FTSE 100 after the UK voted to leave the EU. Shares in the company fell six per cent in early trading on Wednesday, and are down more than 22 per cent since the referendum in June.
Neil Wilson, markets analyst at ETX Capital, said the move is showing the company is willing to act, as it looks like the worst is yet to come in terms of the UK economy.
He said: “Travis Perkins is closely linked to the wider housing and construction market, which is particularly susceptible to dips in consumer confidence. With uncertainty lingering about the UK and a so-called ‘hard Brexit’, the stock may continue to feel the heat.”
“The firm is also exposed to sterling’s devaluation as it buys products from dozens of overseas countries.”
Charlie Campbell, an analyst at Liberum, said it was not clear whether the company's problems were "due to uncertainty around the EU referendum and its after-effects or a sign of more fundamental weakness".
In August Travis Perkins had warned that Britain's vote to leave the European Union had created "considerable uncertainty" in the outlook for the building supplies market, with sales slowing in July.
Last month rival supplier Wolseley said it planned to cut around 800 jobs in response to tough competition and weak trading.
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