Freemans Grattan Holdings, the UK arm of German home shopping giant Otto, has been given a £10m cash injection from its parent company to stem losses at the UK business.
Otto UK chief executive Koert Tulleners said the cash was a “sign of confidence” from Germany, which came after Freemans Grattan Holdings’ turnover fell by a third in the year to February 28 following significant restructuring. Sales at Freemans Grattan Holdings slipped to €262m (£223.9m) in Otto Group’s full-year results.
Tulleners said: “This will increase our operating capital. We ran at a major loss last year.”
He said the business is performing better after cutting costs by more than a third, including axeing about 2,300 of its 3,800 UK workforce. He said that the womenswear offerings Kaleidoscope and Bon Prix were performing well so far this year.
Tulleners added that Freemans Grattan Holdings was also reducing the size and circulation of its catalogues to streamline the business. He said that Freemans Grattan Holdings expects to return to profit in its current financial year.
“This has all been done to bring the business back to a profitable basis,” he said.
Several home shopping groups have had to cut jobs and close parts of their business in the past few years as the traditional catalogue shopper moves increasingly to online as their main means of shopping from home.
Last week Shop Direct Group, which runs Littlewoods and Woolworths.co.uk, closed the doors of its call centre in Sunderland.
Shop Direct said in January that 900 jobs across three contact centres would be put under consultation as more of its sales migrated to online platforms.
Although many of the staff from the Sunderland centre have since found new jobs, union bosses said that they were still in dispute with the company over the level of some of the redundancy settlements.
No comments yet