Johnson to close 100 high street dry cleaning outlets as recession bites

By DOMINIC JEFF
Published on 05/07/2012 00:00

THE UK’s largest dry cleaning chain will close more than a fifth of its stores this year in response to declining trade on the high street.

Johnson Service Group said yesterday that it will close 100 of its 460 Johnson Cleaners stores as part of a restructuring after like-for-like sales fell 0.5 per cent in the first half of the year.

The firm has not yet released a list of stores to close but said its loss-making units are typically on the high street in towns suffering from the downturn.

It said that the stores it is closing had suffered sharp falls in sales in the past 18 months, whereas the continuing shops had been “marginally positive”.

Executive chairman John Talbot said the measures will re-focus the firm into a more streamlined and profitable business. He added: “We have confidence that our continuing dry cleaning estate will not only be able to withstand the current retail environment but make a telling contribution to the group’s future performance.”

The company said a typical store has one full-time and two part-time employees, while there will also be cut-backs in back office and warehousing staff, suggesting that the equivalent of at least 300 full-time jobs will go in total.

Johnson said a continuing strong performance from its textile rental and facilities management businesses offset the sales reduction in the dry cleaning arm, and results should still be in line with previous guidance.

Andy Hanson, analyst at Northland Capital Partners, said Johnson’s reduced portfolio should minimise concern over its exposure to UK high street.