Dobbies cuts jobs after review

Chief executive reaffirms centre strategy as England regional manager is among redundancies.

Dobbies chief executive James Barnes has said his 32-centre chain has not changed strategy despite making up to 25 staff redundant this spring.

The Edinburgh-based, Tesco-owned company laid off England regional manager Jim McKee and the other positions following a review of the business.

"As any business grows, you have a chance from time to time to look at what's going on," said Barnes. "We've had a 63 per cent increase in top-line sales over the past four or five years and in any business it is sensible to review how you do things."

He added: "We've made a number of changes on how we operate at stores and head office to make us more efficient. All businesses in this environment would need to keep themselves as lean and efficient as they can."

Barnes said out of 3,000 staff, around 20-25 had been made redundant. He added that Dobbies was completing a store rebuild programme, spending between £3m and £4m on more than 20 projects in "the largest refurbishment in our history".

The plan remained for 100 centres and £100m turnover by 2018, he said. "We have to compete for capital in the Tesco group but longer-term ambitions are intact. Historically, we have not been restricted on new developments."

Dobbies opened six centres in the past financial year, which Barnes said was "a record for us and a record for greenfield sites in the industry".

With just York, East Kilbride and Kings Lynn stores in planning, Barnes said: "There will be fewer this year but the pipeline has never been stronger."

Sales under pressure Capital balance

New Dobbies figures are due at the end of April. Turnover was 8.7 per cent up in the year to February 2011 at £112m, but excluding new store openings sales were down 0.8 per cent. Pre-tax profits were £9.9m against £9.7m.

Tesco, which is under new management and has issued a profits warning, lent Dobbies £150m interest-free in 2008 with £96m left by August 2011.

Directors recommended no full-year dividend and no performance bonus for 2010-11.

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