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Kurt Geiger announces plans to reduce its staff by over 25% in letter to Rishi Sunak

Tom Shearsmith
12 October 2020

Kurt Geiger is planning a further 500 job cuts early in 2021, according to CEO Neil Clifford in a letter sent to chancellor Rishi Sunak, equating to over 25% of its workforce.

In the letter, sent last Thursday, Clifford says: "The Association of International Retail estimated that 70,000 jobs will be lost at the worst possible time. Kurt Geiger alone is now planning another 500 job losses early next year, which equates to over 25% of our workforce."

The letter continues, criticising the Governments decision to end tax-free sales on electronics and clothes at airports, after the UK leaves the EU.

It reads: “Dear Rishi, I know you are aware that the coronavirus pandemic has ripped the heart out of the British High Street. I can speak for all retailers that we thank you for the fast and effective actions to support the sector.

"COVID-19 has meant that our footfall collapsed as office workers stayed at home, international visitors disappeared and consumers, worried about the economic fallout, stopped spending; all of which have contributed to our biggest fall in GDP on record for the UK.

“For Kurt Geiger, 2019 was our fifteenth year of continued sales and profit growth and suddenly, businesses like ours have been fighting to stay afloat. We've been quickly investing to encourage even more online sales, whilst in parallel trying to do our bit to help out by urging our staff who were unable to come to work, to use their time to volunteer and assist vulnerable people in their local communities who needed support.

“Like many other businesses, we wanted to really play our part at a time of national crisis – the government encouraged us to help, therefore we thanked frontline workers with £750,000 of shoes and handbags, we topped up the salaries of all our lower paid workers, and immediately created new products with all profits going to the NHS with a goal of raising £1m this year.”

“While stores have now reopened and were slowly recovering, the second wave of COVID-19 is sadly here, and this combined with the new understandable lockdown measures being introduced, means it is becoming ever-clearer that British business is going to be living with the consequences of the pandemic for not months but for years to come.

“Already we have seen nearly 700,000 job losses since the crisis began and surely everyone can agree that we should be straining every sinew to avoid any more."

It continues: “With job protection front of mind, imagine my surprise therefore, when the Treasury announced its plans to scrap tax-free shopping for international visitors when the Brexit transition period expires on 31 December this year.

“This would honestly be a staggering own goal which completely undermines the government's stated aim to build a "global Britain" post-Brexit. As you know, every country in Europe and most major tourist destinations worldwide offer tax-free shopping. Britain will become the only country in Europe not to offer it, putting our economy at a significant disadvantage. British shoppers visiting any EU country will be able to shop tax-free. This decision will deal a tremendous blow to the UK economy at an incredibly difficult and fragile time.

Businesses like Kurt Geiger rely heavily on the tax-free shopping scheme. Visitors to the UK don’t just spend in retail stores – their custom supports hotels, restaurants, and theatres, which experts tell us is worth at least £22 billion a year to the UK's wider economy.

"If we suddenly start charging 20% more than other countries for the same goods, international visitors will immediately go elsewhere, taking their vital spending with them.

“The loss of tax-free shopping will make the UK a much less attractive destination for business visitors and tourists. There will be far fewer people coming here and those that do will buy less. The damage will be significantly wider than the Treasury envisages, our luxury goods manufacturing based will be badly wounded and all global brands will halt any investment in the UK due to dramatic drop in demand.

“At a time when UK retail employment needs more support than ever before, it is ludicrous that it is poised to become the only country in Europe not to offer tax-free shopping.

“Instead of closing the VAT Retail Export Scheme, the government should in fact be extending it. 70% of all international visitors to the UK are from the EU, but they are not eligible for VAT rebates on their purchases because we are members of the Customs Union within the UK.

The letter concludes: “Even if as rumoured that this decision is temporary, to withdraw tax-free shopping entirely rather than extending it to the EU as we leave will have deeply damaging consequences to employment and the UK economy as a whole. I urge you please to reconsider this decision.”

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