Selfridges is making another round of redundancies as the loss of tax-free shopping for visitors to the UK is blamed for a dip in luxury spending.

Brass Selfridges sign on London store wall

Selfridges is suffering the effects of “external headwinds” leading to job losses

Around 70 head office roles will be axed, with the latest round of redundancies coming nine months after the department store’s last round of cuts at its headquarters.

In a memo sent to staff and seen by The Sun, Selfridges chief executive Andrew Keith blamed the job losses on the scrapping of tax-free shopping for tourists.

Keith added that the group “cannot ignore external headwinds” including online challenges.

“The huge growth in online luxury that was widely forecast post-Covid has not materialised at the pace expected … we recognise a need to prioritise our tech and digital roadmap,” he said in the memo.

The demise of tax-free shopping for international visitors to the UK is said to have affected sales at the department store, which is partly dependent on footfall and sales from wealthy tourists.

Selfridges Retail, which includes four department stores in the UK and its online store, reported a 29% rise in revenue to £843.7m for the year to January 28, 2023, while losses before tax narrowed to £37.9m from £121.5m.

In a statement, Selfridges said: “The continued absence of a tax-free shopping scheme in the UK has significantly impacted international sales. Our proposals mean making around a 2% reduction in our overall headcount.

“The proposed reduction equates to approximately 70 roles across specific head office departments. However, we hope to offer a number of those impacted redeployment opportunities.”

Store employees will not be impacted by the layoffs.

Selfridges is not the only luxury store to have suffered from the loss of VAT-free shopping; Mulberry and Burberry have also warned that the decision to scrap it in 2021 has harmed the sector and led to weaker UK sales.

Retail bosses are urging the government to bring back tax-free shopping as they say international visitors are choosing cities such as Paris, Milan or Barcelona over London due to the tax incentives they offer.