Pendragon to close 15 stores, cut 1,800 jobs
Car dealership Pendragon has announced plans to cut around 1,800 jobs across the business as it closes stores due to the Covid-19 pandemic.
The company had launched a review of its operations before the pandemic struck but said the onset of the crisis had accelerated the review and it has now decided "to introduce a more efficient operating model with fewer stores and leaner support functions".
As a result, 15 stores - most of them loss-making - will be closed. This will lead to around 400 job losses, with estimated one-off redundancy costs of £1.2m and closure costs of £1.0m. There will also be associated lease and asset impairment charges of about £5.5m.
"The board has concluded that a leaner and more sustainable operating model is necessary to safeguard the Pendragon business and position it to deliver improved results over the short to medium-term, against what is expected to remain a challenging economic environment," it said.
"This decision has been taken as a result of work undertaken pre-Covid-19 and follows efficiency gains achieved during the lockdown and in the subsequent reopening programme."
The proposed changes to the operating model are expected to result in around 1,400 redundancies and reduce annual costs by £35m, with an estimated one-off cash restructuring cost of £5m.
Pendragon owns Evans Halshaw, Stratstone and Car Store.