Selfridges, a renowned department store, is set to implement job cuts attributed to the discontinuation of tax-free shopping and a decrease in luxury spending.
CEO Andrew Keith attributed the upcoming redundancies to the government’s cessation of tax-free shopping for international tourists, as reported by The Times.
Approximately 70 positions will be eliminated, marking the second round of job cuts within nine months. The company assured that these cuts will not affect store workers.
The elimination of VAT-free shopping for foreign tourists has reportedly impacted sales at Selfridges, which relies partly on purchases and foot traffic from affluent international visitors to the UK.
In its recent financial report, Selfridges Retail recorded a 29% surge in sales, totaling £843.7 million for the fiscal year ending on January 28, 2023. Pre-tax losses also decreased from £121.5 million to £37.9 million compared to the previous year.
Selfridges stated, “The absence of a tax-free shopping scheme in the UK continues to significantly impact international sales. Our proposed measures entail a roughly 2% reduction in our overall workforce.”
“This reduction translates to approximately 70 positions across specific head office departments. However, we aim to provide redeployment opportunities to some of those affected.”
Earlier this month, Julian Dunkerton, co-founder and CEO of Superdry, cautioned that consumers were choosing to shop in Europe over the UK due to the cessation of tax-free shopping. Dunkerton described the decision not to reinstate the scheme allowing international visitors to reclaim 20% VAT as a “self-inflicted wound.”
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