Selfridges Set for Job Cuts, Citing Freeze on Tax-free Shopping

LONDON — Selfridges is planning to cut 2 percent of its headcount, or around 70 roles, in a challenging period for British retail.

According to a memo seen by WWD, Selfridges’ chief executive officer Andrew Keith told staff the proposed job cuts pertained to “specific head office functions,” and that store team members were not affected. 

The cuts, he added, are a response to “market conditions, and the evolving needs of our customers.” The store said it hoped to offer “redeployment opportunities,” to a number of those impacted by the layoffs.

The memo added the continued absence of a tax-free shopping scheme in the U.K. “has significantly impacted international sales,” and that Selfridges was “responding decisively to changes we’re seeing from an international and digital perspective.”

The store declined to comment on the memo.

As reported, British businesses have been repeatedly urging the government to restore tax-free shopping in the U.K., which was eliminated following the country’s exit from the European Union.

Pre-Brexit, shops in London and Bicester Village in particular had become magnets for wealthy, international customers who were able to claim back VAT, or value added tax, on their purchases. At one point, Selfridges even had a special suite where it would process tax-free shopping paperwork.

Despite the industry’s efforts, the government has indicated it would rather keep the tax-free program on hold, and pocket the hundreds of millions of pounds in taxes it receives from tourists’ purchases each year.  

Over the past years, principals at Burberry, Mulberry, Watches of Switzerland, Harrods, Selfridges, Harvey Nichols, and the luxury industry lobby Walpole have repeatedly asked the government to restore the program.

Last year, there was even a parliamentary debate about the issue, the result of a campaign by the Association of International Retail and New West End Company, which oversees hundreds of retail and hospitality businesses around Regent and Oxford Streets.

It has not been an easy 12 months for Selfridges Group, which saw one of its shareholders, Signa Holding, file for bankruptcy.

Thailand’s Central Group, which had partnered with Signa to buy the retailer, later took control of the retail operating company. It is still considering a purchase of the property division, which Signa controlled. 

Two years ago, Signa and Central joined to acquire Selfridges for a reported 4 billion pounds. They each took a 50 percent stake in the retailer, which they split into two businesses, a property one and a retail one. The latter pays rent to the former.

After Signa’s troubles surfaced, Central took control of the operating company that oversees the Selfridges stores in the U.K.: Brown Thomas and Arnotts in Ireland, and De Bijenkorf in the Netherlands, which are all part of the Selfridges Group. 

Central has said that “regardless of the position of our JV partner,” it is committed to supporting all of its European luxury stores.