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Photographic chain Jessops to close 81 stores and axe 550 jobs |
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Date added - 22/06/07 Due to strong competition from Internet retailers and supermarkets like Tesco Jessops has decided to close 81 of their shops bringing their overall number down to 234 from 315. The closing of 81 of their stores will result in the cutting of 550 employees. Jessops headquarters are located in Leicester, after experiencing a record shares fall in March they decided to launch a company review to rectify the problem. The review found that Internet retailers with low overheads and the power of supermarket chains who buy in bulk were bringing the price of photographic hardware down. This in turn was making it harder for high street stores to turn over a profit because sales were down due to online competition and the profit per sale down due to supermarkets. The report also found that around 47 of their stores overlapped in the same area, and 31 are loss-making. Finally the report concluded that the digital camera market "has come off the boom", with the majority of customers having now transferred to digital from analog. The news had a positive effect on their share price, with a 6.95% rise on the day the news was released. However this has done little to ease the fears of shareholders who have experienced a 68% share plunge since the end of February of 2007. David Adams executive chairman said: "This will allow Jessops to reposition as a true multichannel retailer for items like camcorders, we are confident it will deliver a turnaround in our financial performance." A loss of around £6 million pounds is expected for 2007, compared with a profit of £5 million in 2006. HSBC has provided a loan of £66.5m for the next 18 months Jessops still feel there is a space for independent stores with
specialist knowledge and stocking high end equipment.
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