A statement issued via the London Stock Exchange today (July 30) revealed that Pendragon has a plan to cut 1,800 jobs from its UK car retail network to create a “leaner and more sustainable operating model” in the wake of the COVID-19 crisis.
The group will initially close 15 dealerships (7 freehold and 8 leasehold).
The new model is expected to result in a total of around 1,800 redundancies in an effort to save £35m.
Bill Berman, Pendragon’s Chief Executive, said that its restructuring proposals “reflect our intention to create a resilient, leaner and more profitable business across the entire group.”
He added: “These have been difficult decisions for the Board to make and our priority now is to manage the transition to our new operating model. The COVID-19 pandemic is a uniquely challenging situation and we want to protect as many jobs as we can sustainably and the proposed redundancies are, of course, extremely regrettable. During the pandemic we have focused on ways to improve workflow, efficiency and our digital capabilities. It is paramount that we embed these behaviours into all areas of the business, as we expect the economic environment to remain challenging. The actions that we are undertaking are for the long-term health and success of the group and ensure that we emerge from the pandemic as a more competitive and stronger business with the ability to thrive in the future.”
Pendragon reported a £117.4 million loss in March after tax from trading.
Including Stratstone and Evans Halshaw, the underlying operating profit at Pendragon’s franchised motor division was £4.4m. This is a decline of £4.7m from Q1 2019.
Pendragon’s Car Store division of used car supermarkets reduced operating losses from £7m in Q1 2019 to £1m in Q1 2020.
Bill Berman said: “I would like to take this opportunity to thank every one of our employees for the hard work that has been done to reopen our businesses from lockdown.
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