Wolseley UK has announced a major transformation programme for its plumbing and heating business, which the company said is likely to result in 80 branch closures and up to 800 redundancies.
The business has conducted a wide-ranging review of its plumbing and heating operations, and now plans to implement a transformation plan and £100m investment to create a 'leaner, more efficient operating model' which it says will significantly improve service levels, product availability and choice.
The company said it will now embark on a employee consultation process, and is as yet unable to identify which branches may close, or under what brands.
Patrick Headon, managing director of Wolseley UK, said: "We have put the customer at the heart of this review with the aim of making Wolseley the first-choice specialist merchant in our chosen markets. We have a great business in the UK and there are continued opportunities for growth. I'm confident the transformation programme will drive better customer service and employee engagement and improve our financial returns.
"The trends in our profitability have been disappointing and we need to take action to improve our customer proposition and the efficiency of our business. We have an outstanding team made up of hard working and dedicated people across the UK and we are very conscious of the impact this transformation of the business will have on some of them. We are therefore committed to carrying out this programme as sensitively as possible, using voluntary means to achieve the proposed headcount reductions wherever possible. Over time, I'm confident our proposals will benefit both our colleagues in the UK and the customers they serve every day."
Wolseley's proposed transformation plan aims to create a well-defined customer offering, with a unified branch estate and single sales network, and a new operating model offering flexible delivery and collection times.
The company believes the re-organisation of its logistics and supply chain network will be carried out over the next two to three years, resulting in lower capacity requirements and enabling the business to operate from three regional distribution centres instead of four.
The plan is expected to deliver annualised cost savings of £25m to £30m.