GUS axes 150 jobs at ARG to reduce costs

GUS, the UK's biggest catalogue retailer, is to axe 5 per cent of group staff at its ARG Equation home shopping business as it strives to cut costs.

Staff were informed yesterday that up to 150 jobs would go from the division, after a 90-day consultation process.

A small number will also go from the IT department of logistics arm Reality.

GUS said the changes are the result of an increasingly tough agency catalogue market, which led to a drop in sales of 8 per cent in the 14 weeks to January 4.

Alan Taylor, the recently appointed managing director of ARG Equation, said he regretted having to make the cuts in the 4,000-staff division.

He explained: 'The plan is to bring us in line with the rest of the industry and with the global retail industry. At the moment, we are competing in the same market but are disadvantaged.'

Taylor pointed to growing competition from supermarkets and discount sheds.

Initiatives will also include the introduction of new trading terms with suppliers and cost cuts in the supply chain.

Taylor said the new terms would increase competitiveness and that some suppliers will benefit from closer ties to the company. Some suppliers will be lost, but Taylor said there was 'no radical rationalisation plan.'

Industry sources unconnected to GUS said that a letter was sent to clothing suppliers on Wednesday, demanding an increase in the agreed discount from 8 per cent to 12 per cent.