Dobbies, the UK’s largest garden centre, has announced the closure of 17 stores by the end of this year, including one in Inverness, Scotland. The closure is part of a restructuring plan to address unprofitable stores. The plan includes shutting down 11 mainline sites and six smaller “Little Dobbies” stores to tackle historically uneconomical rent costs and ensure sustainable profitability. While the company has not entered administration, the restructuring plan requires approval from landlords and court ratification.
According to the Mirror, similar schemes have been used by companies to close underperforming stores and negotiate rent concessions with landlords. If approved, the plan will affect 465 out of 3,600 employees, leaving Dobbies with 60 garden centres across the UK. The company will also work with landlords to seek temporary rent reductions at an additional nine sites. The restructuring plan has been developed in collaboration with FTI Consulting and the company’s shareholders, Ares.
Despite the closures, Dobbies reassures that store operations and supplier relationships will continue unaffected. The Renfrewshire-founded company has been facing significant losses, reporting a £130 million loss in the latest annual results. The financial challenges prompted a financial overhaul plan in August, as the weather and high inflation contributed to the losses. This move comes 18 months after Ares took control of the company from Midlothian Capital Partners. Dobbies stated that the restructuring programme aims to secure its long-term future by rationalising sites, reducing rent, and cutting costs to return to sustainable profitability.
The list of Dobbies stores set to close includes locations in Inverness, Altrincham, Antrim, Gloucester, Gosforth, Harlestone Heath, Huntingdon, King’s Lynn, Pennine, Reading, and Stratford-upon-Avon, as well as several Little Dobbies stores in Cheltenham, Chiswick, Clifton, Richmond, Stockbridge, and Westbourne Grove. The company’s announcement underscores the challenges many businesses are facing in the current economic climate, as they seek to adapt and streamline operations to ensure long-term viability amidst ongoing uncertainties.