Selfridges is to make job cuts due to the loss of tax-free shopping and reduced luxury spending.
The department store’s CEO Andrew Keith claimed the new set of redundancies had been caused by the government ditching tax-free shopping for international tourists, The Times revealed.
Around 70 jobs will be lost, nine months after its previous set of redundancies. It claimed that store workers will not be impacted by the job losses.
The loss of VAT-free shopping for foreign tourists has reportedly weakened sales at the business, which partially relies on purchases and footfall from wealthy international visitors to the UK.
In its latest results, Selfridges Retail saw a 29% increase in sales to £843.7m for the year to 28 January 2023, and pre-tax losses before tax narrowed to £37.9m from £121.5m the prior year.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Selfridges said: “The continued absence of a tax-free shopping scheme in the UK has significantly impacted international sales. Our proposals mean making around a 2 per cent reduction in our overall headcount.
“The proposed reduction equates to approximately 70 roles across specific head office departments. However, we hope to offer a number of those impacted redeployment opportunities.”
Earlier this month, Superdry co-founder and chief executive Julian Dunkerton warned that people were opting to travel to Europe instead of the UK to go shopping following the end of tax-free shopping.
Dunkerton said the decision to not reinstate the scheme that allowed international visitors to reclaim 20% VAT was a “self-inflicted wound”.
Click here to sign up to Retail Gazette‘s free daily email newsletter
