Shop Direct (Littlewoods) cuts 1,150 jobs - claims strong business

28 January 2009

Shop Direct group (formerly Littlewoods Home Shopping) has dropped a stunner by closing their Crosby call centre thus axing 1,000 jobs and a further 150 redundancies at their Liverpool headquarters.

Despite this drastic cut, the group claims a "strong and growing" business, claiming the job cuts are due to a decrease in telephone support as the sales shift away from the traditional catalogue to online. Shop Direct announced a 44% growth in online sales over Christmas with the online division now accounting for 56% of the groups sales. Further they noted the group as a whole grew sales 9% over Christmas.

A bit of back-of-the-envelope-Bitterwallet-math indicates the 44% in online sales must be propping declining sales in catalogue business if the group only grew 9% as a whole. Although the massive loss of jobs is definitely not the news Shop Direct employees wanted to receive, does this indicate Shop Direct is on the road to a healthy recovery?

With high street merchants hitting the Deathwatch lists and stalwarts such as Comet and DSGi suffering does the huge online growth of Shop Direct indicate the future of the price conscious merchant is online only?

There is no word on how much the Littlewoods voucher codes contributed to the big uptick in Christmas sales...

[BBC] - Thanks for the heads-up Richard!

20 comments

  • andy y.
    I think is something more simple,our addiction to consumption is currently in cold turkey mode. We need another bubble
  • M»Y
    no rice izih ?
  • not_the_messiah
    Hopefully the people that are getting the sack are the rude, pig ignorant people that I have had to deal with on the phone in the past that are getting the sack... Good riddance. To all the other people that don't fall into this category, my heart goes out to you...
  • veedubjai
    @ not_the_messiah. What do you expect, they are Scousers after all where they are based at. I have in the past had to deal with customers especially Scousers that tend to have attitude problem. I am not saying EVERY Scouser as some are calm & collective, polite & friendly but a majority of them are not.
  • What M.
    Paul Nikkel - you need a bigger envelope, or preferably get someone who doesn't write with crayons to do the working out for you. They said: the job cuts are due to a decrease in telephone support as the sales shift away from the traditional catalogue to online. They said: the online division now accounting for 56% of the groups sales. A 9% growth in turnover is excellent on a like-for-like basis in any market conditions. I a recession, it's rather good, but that is also when catalogue buy-now-pay-later outfits do best. It is a largely online business - why phone up to order something when you can order online, get Quidco, use a dodgy voucher code or exploit a misprice???
  • Paul Nikkel EDITOR
    I will never say I'm a math ace but I think you misunderstood me? In any case - If online is 56% of the group and it grew 44% over Christmas but the group as a whole only grew 9% that indicates to me that the offline part of the group shrunk during Christmas otherwise the overall group percentage growth should be higher. I'm sure someone out there is better at maths and can tell us exactly how much the offline sales fell by using those figures.
  • benjimoron
    Sales grew by 9%, that's the only figure you need to know. It doesn't matter whether the orders were placed over the phone or on-line, it's still growth. It's rather obvious that in this day and age growth on-line will increase each year whilst growth off-line will decrease. It all helps to drive down costs but at the cost of people's jobs.
  • Paul Nikkel EDITOR
    That was partially the thrust of the article however I'd disagree and say the breakdown is important. I'm not really joking about the online codes and Shop Direct sales growth... what is the profitability on those online sales compared to offline? If the offline one is falling fast and online is growing but not in a positive way it's not all good news. That's a pessimistic take and the more optimistic one is that online is more profitable as they don't need that call centre to take orders etc (but surely they need more after sale support?). Anyway the breakdown is essential and of course one could say the way they released the info was to specifically cover the quickly declining offline sales. It's all good as you say if they are boosting sales and capturing the online market though.
  • benjimoron
    Where you say sales grew 9% I guess I'm thinking profit grew 9% when actually it might not have done. I think the move towards people buying on-line is obvious though. p.s. why do my posts have to be checked before they are posted? Am I not trusted?
  • benjimoron
    Any why do they need more after sales support for an on-line sale compared to an off-line sale?
  • Paul Nikkel EDITOR
    It's sales numbers not profit numbers. It's just a guess but as people aren't taken through the sales by an advisor I'm just guessing there would be. Off hand comment - dont' really know.
  • crofter
    Hang on I don't quite get this ... Sales grew 9% yet 1,000 people are out of a job!! No hang on I am sure somebody will explain this to me, but I am confident that (this huge growth of) online customers will still need to contact Customers Services probably just as much as as customer solely using the catalogue. I really suspect that this "recession" is letting the large companies slash their workforce now because nobody (ie the unions, MPs etc.) can do or say too much about it ... am I alone in this train of thought??
  • benjimoron
    I bet they put through loads of sales of wii fits at £40, which I expect they would currently make a loss on if they indeed supply them all. However they may decide they actually want £70 for them after all. Now that would be an interesting thread!
  • benjimoron
    "Hang on I don’t quite get this … Sales grew 9% yet 1,000 people are out of a job!!" Sales grew, however profit may well have dropped, they may have even made a loss, no way of knowing with those figures. "online customers will still need to contact Customers Services probably just as much as as customer solely using the catalogue." For a start, seeing as their order is placed on-line, that's one less call per customer already. The rest would probably be similar though. "I really suspect that this “recession” is letting the large companies slash their workforce now because nobody (ie the unions, MPs etc.) can do or say too much about it … am I alone in this train of thought??" Not alone at all, it's a great excuse for companies to make people work harder and cut costs when they would normally not get away with it!
  • benjimoron
    Paul, what's this about my posts need moderating???
  • crofter
    Yeah but profits shouldn't be coming into the argument on this ... Sales are up 9% so if they are making a loss I don't think it is the Customer Service Department that needs to be collecting their jotters!!
  • Paul Nikkel EDITOR
    mod filter was catching you due to someone else. Tweaked it so you should be fine now. RE unions and cuts. Yes it is probably easier for companies to push cuts through particularly because unions will be scared to strike/bargain hard. Most workers are probably more afraid of losing their jobs than fighting for the people already cut.
  • benjimoron
    If they make less profit, they've got to cut costs otherwise they'll be out of business before long.
  • benjimoron
    Someone else you say?? I think I know who it was!!!!
  • The B.
    Are they ever likely to pay me the £4 that was left in my account when I closed it 7 years ago?

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