According to Retail Gazette, The Mirror and other news sources, the UK’s largest garden centre chain has announced it is to close 17 sites by the end of the year.
Dobbies has launched a restructuring plan, which will see it close 17 unprofitable stores, as it aims to “address historically uneconomical rent costs and ensure a return to sustainable profitability”.
The garden centre business will close 11 mainline sites and six Little Dobbies stores, all of which are unprofitable. With 465 of its 3,600 employees impacted. The move will leave it with 60 garden centres.
“The restructuring programme and other strategic initiatives, are expected to return Dobbies to sustainable profitability through site rationalisations, rent reductions and other tangible cost savings”
The retailer will also work with landlords to seek temporary rent reductions at a further nine sites. The restructuring plan aims to “address historically uneconomical rent costs and ensure a return to sustainable profitability.”
Dobbies has not been put into administration, but the restructuring plan must be agreed by the landlords and ratified by a court. These types of schemes have frequently been used by retailers to shutter underperforming shops and win rent concessions from landlords. The plan has been put together by FTI Consulting with Dobbies’ shareholder, Ares, and Dobbies.
The restructuring plan comes 18 months after the American investment management firm Ares took control of the business from Midlothian Capital Partners. Prior to that, it spent almost a decade under as part of Tesco.
In its announcement, Dobbies said: “The restructuring programme and other strategic initiatives, are expected to return Dobbies to sustainable profitability through site rationalisations, rent reductions and other tangible cost savings – securing its long-term future and allowing access to future investment.”
