Adding to the thousands of layoffs announced by companies across Britain, Pendragon said on Thursday it would shut 15 loss-making stores and slash 1,800 jobs. Inchcape did not specify how many employees would be affected.
Global lockdowns to tackle the pandemic have taken a heavy toll on Britain’s car dealers, which were already struggling with uncertainty caused by the country’s protracted exit from the European Union.
Rival Lookers LOOK.L set out plans last month to lay off 1,500 employees and shut 12 more sites.
Inchcape shares tumbled 9.9% to 439.6 pence after it also reported first-half a pretax loss of 188 million pounds ($245 million) compared with a profit a year earlier, largely due to impairment charges.
The company, with operations in more than 32 international markets, said its restructuring programme would cut costs by more than 90 million pounds.
Pendragon, which operates the Evans Halshaw, Stratstone, Quickco and Car Store brands, said its planned changes followed a review that was started before the pandemic struck and would cut annual costs by about 35 million pounds.
“The impact of COVID-19 has accelerated a review of the Group’s future operating model ... the Board has taken the decision to introduce a more efficient operating model with fewer stores and leaner support functions,” it said.
Pendragon’s shares were last down 1.1% at 7.98 pence.
In May, Pendragon reported underlying pretax losses of 2.3 million pounds for the first quarter.
British car production fell by more than 40% year-on-year in the first half of 2020 to its lowest level 1954, according to an industry body.
Reporting by Samantha Machado in Bengaluru; Editing by Vinay Dwivedi and Mark Potter
Our Standards: The Thomson Reuters Trust Principles.