June 4, 2020 / 6:21 AM / a month ago

Lookers to cut 1,500 jobs, 12 more dealerships after lockdown hit

(Reuters) - Car dealership firm Lookers (LOOK.L) on Thursday set out plans to close 12 more sites and lay off 1,500 employees as it struggles to emerge from the coronavirus crisis, while still dealing with a probe into transactions at some of its operations.

The British company, which in March delayed its annual results after identifying potentially fraudulent transactions in one of its segments, said its financial report will be published by the end of June. ​

Lookers said the closures were in addition to 15 announced last November and would leave the company with 136 dealerships in total. It said business has resumed across the group, albeit at a lower capacity, after the coronavirus lockdown forced it to halt operations at all its trading locations.

Initial demand for after-sales services from customers has been encouraging, Lookers added.

“Given the ongoing uncertainties faced by the Group in the early days of reopening the business, the Board continues to believe that it is too early to make any reasonable estimate of the financial impact on the Group during 2020 and beyond,” the company said.

The site closures and job cuts will result in annual savings of about 50 million pounds ($62.65 million), it said.

Besides the virus crisis, Lookers has also been on the spotlight after it revealed that an initial probe found misstatements in its balance sheet and fraudulent expense claims.

Against that backdrop, merger talks between the company and its rival Pendragon (PDG.L) fell through in May, with a media report saying that Lookers rejected the approach.

Reporting by Muvija M in Bengaluru; Editing by Vinay Dwivedi

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