Otto UK, the home shopping business, will kick off a 90-day consultation with its entire 3,800 staff next week, as it looks to dramatically downsize its business.
Otto UK, has also rebranded to Freemans Grattan Holdings (FGH).
FGH chief executive Koert Tulleners told Drapers: “We are in consultation with the whole company about a restructure of the UK business. The consultation will last a minimum of 90 days, it involves 3,800 staff.”
Tulleners said the consultation would have a “significant impact on employment across all departments” but would not confirm how many jobs could be lost.
Tulleners said he will also shut its warehouse in Bradford, which is attached to the company’s headquarters, and its warehouse in Peterborough. He plans to relocate and downsize a third warehouse, also in Bradford.
Tulleners said: “We are running at significant losses. To shut down the company would be the cheapest solution, but we are categorically not shutting down the business. I firmly believe in the UK market. The UK is the fourth largest [home shopping] market in the world and Otto Group [FGH’s parent company] is the number one home shopping company in the world.”
He said Otto UK (or FGH) ran into problems as it continued to operate from multiple locations in a difficult market, and the decisions taken today should have been taken years ago.
Tulleners said he was looking to downsize the UK company to make it more cost efficient, but he said he had no plans to offload any of its brands which include Freemans, Grattan, Oli and Kaleidoscope.
Drapers exclusively revealed that Otto Uk had begun a first phase of consultations with its buying and merchandising team back in November.
Tulleners said: “The best and most secure outcome we can all work towards is to return FGH to profitability by the end of 2010. This will be achieved through efficiency gains, rationalisation of our disparate locations, closer integration of our catalogue and successful online shopping operations, and adopting the customer-responsive, fast-moving retail culture which today’s competitive market conditions demand.”