Wolseley UK has announced a major programme to transform the way it serves its customers following a wide-ranging review of its plumbing and heating operations, which will see around 80 branches closing with an anticipated 800 jobs lost.
Making a £100m investment into this transformation plan, Wolseley UK aims to improve service levels, product availability and choice. While brands including Plumb Center and Climate Center may be affected, the civils, utilities and infrastructure businesses in the UK remain unaffected.
Patrick Headon, managing director of Wolseley UK, said: “We have put the customer at the heart of this review with the aim of making Wolseley the first choice specialist merchant in our chosen markets. We have a great business in the UK and there are continued opportunities for growth. I’m confident the transformation programme will drive better customer service and employee engagement and improve our financial returns.
“The trends in our profitability have been disappointing and we need to take action to improve our customer proposition and the efficiency of our business. We have an outstanding team made up of hard working and dedicated people across the UK and we are very conscious of the impact this transformation of the business will have on some of them. We are therefore committed to carrying out this programme as sensitively as possible, using voluntary means to achieve the proposed headcount reductions wherever possible. Over time I’m confident our proposals will benefit both our colleagues in the UK and the customers they serve every day.”
Wolseley UK’s proposals include simplifying the businesses through two distinct customer propositions: one dedicated to the needs of medium and large specialist trade customers, and one for small specialist trade customers. £40 million will be invested over the next three years in newly refurbished branches. A local network of c.450 branches will offer local expertise across a broad range of product categories. Additionally, a network of c.80 larger destination branches, will provide in-depth expertise in all areas - these sites will be open seven days a week. All customers large or small will be able to use the whole branch network. The sales network will be unified, creating one organisation and providing larger customers with a single point of contact. Investment will also include creating new transport hub locations to deliver products nationwide.
In a statement, Wolsleley said: 'The review has identified an opportunity to drive efficiencies and lower our cost base to strengthen the business. Regrettably, we expect this will result in the closure of around 80 branches across the UK and up to 800 redundancies. The reorganisation of our logistics and supply chain network, which we plan to complete over the next two years, will result in lower overall capacity requirements in our UK supply chain. This will enable us to operate from three regional distribution centres in the UK instead of four which will significantly reduce our operating costs. On this basis, we propose to assess the feasibility of our Worcester DC as the changes in our plan are put in place. This means that whatever the outcome of the feasibility assessment, we believe that this part of our strategy will not impact roles or the number of roles until 2018.'
A period of consultation will now commence with staff at affected sites. Overall, the reorganisation will take two to three years to complete and is expected to deliver annualised cost savings of £25 million to £30 million. It is too early to provide details of which branches will close, either by region or brand identity.