Blue Inc is all set to undergo a restructuring because of poor sales growth. The London-headquartered fashion retailer will close 60 of its 232 stores across the UK, which will result in 500 job losses.
The company, which was once chaired by former Marks & Spencer boss Sir Stuart Rose, blamed its poor winter sales on the warm weather that reduced the demand for winter clothing. Retailer Next too recently blamed the hot weather for lukewarm sales results in the quarter ahead of Christmas.
The move will allow Blue Inc, which sells clothes for men and women, to focus more on its online and international business, apart from its most profitable stores, after its high street presence was significantly boosted following the acquisition of the Officers Club chain in 2011.
Chief executive Steve Cohen said: "Online is becoming an increasingly big part of the business. Given the strength of online and the changing environment on the high street we decided now was the right time to evaluate the store portfolio."
"We're investing in areas of growth for the future, as well as continuing to support those parts of the retail estate where Blue Inc has a strong customer base. The core business and store estate remains profitable," Cohen added.
He explained that most of the stores that the company had decided to shut down were Officers Club shops. As part of this restructuring, it had even filed a notice of intention to put its subsidiary A Levy, which owns the leases on Blue Inc's stores, into administration.
Blue Inc, which had scrapped its public listing plans in 2014 due to market volatility, witnessed like-for-like sales increase 3% over Christmas as online sales surged. "The core business and store estate remains profitable," Cohen said.