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400 jobs to go at Dorma

Kevin Feddy
4/ 9/2008

BOSSES of Manchester's Dorma bedding and curtains business have begun the process of axing around 400 jobs as they phase out concession stores in shops around the country.

The concessions, in Debenhams, House of Fraser and other retail chains, will close as a result of parent company Dawson International's decision to sell the Dorma trademark to homewares group Dunelm for £5m.

Scotland-based Dawson will continue to supply Dorma branded sheets, pillows, duvets and curtains to Dunelm for at least four years and will continue to provide own-label products for retailers such as Marks & Spencer and John Lewis.

But it will shut its 120 concessions by January 2011 and has started redundancy talks with its employees.

Other jobs will go among the 50-strong team responsible for the design, distribution and marketing of Dorma-branded products.

The division will be merged with the private label operation, which employs a similar number at headquarters in Ardwick and is performing strongly.

Dawson International chief executive Andy Bartmess said: "A lot of the people in our concessions have served with us for years and it is not something we do happily, it's quite difficult. But the branded business did not have a lot of longevity and we need to focus on the more successful private label business."

Sales of Dorma-branded items fell from £12m to £10.6m in the six months to June 28, although losses were reduced from £2.2m to £1.4m, mainly due to the closure of unprofitable concessions and cost reductions. Mr Bartmess said the group would focus on building Dorma's private label operation, which enjoyed a strong first half with sales up from £9.8m to £11.3m and profits up from £500,000 to £1.7m.

He said that Dawson International would incur exit costs of £3.3m with the sale of the Dorma trademark to Dunelm, leaving it with only a small gain.

Group turnover for Dawson, which is based in Kinross, ticked up from £40.1m to £41.7m during the first half despite a difficult trading environment.

Pre-tax losses fell from £2.1m to £1.64m.