Almost 2,600 staff in the beleaguered retail and leisure industries face redundancy after the fitness and gymwear firm DW Sports collapsed and the tour operator Hays Travel announced job cuts, blaming the UK government’s policy on travel to Spain.
As the gloom around the two sectors deepened, DW Sports fell into administration, putting 1,700 jobs at risk.
The group, founded by the former Wigan Athletic owner Dave Whelan, operates 73 gyms and 75 shops across the UK. It said its retail website would cease trading immediately, weeks after it announced plans to shut 25 of its stores as the coronavirus lockdown wiped out its income.
Its remaining 50 shops will continue to trade for the time being but will begin closing-down sales from Monday.
“As a consequence of Covid-19, we found ourselves in a position where we were mandated by government to close down both our retail store portfolio and our gym chain in its entirety for a protracted period, leaving us with a high fixed-cost base and zero income,” said the DW Sports group chief executive, Martin Long.
“Like many other retail businesses, the consequences of this extremely challenging operating market have created inevitable profitability issues for DW Sports.”
The company said that Fitness First, which it also owns and has 43 clubs across the UK, is a separate business and is unaffected.
DW Sports said it intended to support employees, customers and gym members “as far as possible while efforts are made to secure a purchaser for some or all of the DW Sports portfolio”.
Long said: “Having exhausted all other available options for the business, we firmly believe that this process can be a platform to restructure the business and preserve many of our gyms for our members, and also protect the maximum number of jobs possible for our team members.”
The company said it was “inevitable” that some gyms would close.
“The decision to appoint administrators has not been taken lightly but will give us the best chance to protect viable parts of the business, return them to profitability and secure as many jobs as possible,” Long said. “It is a difficult model for any business to manage through without long-term damage, and with the limited support which we have been able to gain.”
The family-owned tour operator Hays Travel announced almost 900 redundancies on Monday, blaming government-imposed restrictions on travel to Spain.
The owners, John and Irene Hays, said the decision to impose a blanket ban, rather than take the more “sophisticated” approach of curbing holidays to affected regions, had led to the cancellation of “hundreds of thousands” of holidays.
“The government have used a very blunt instrument and banned all travel to Spain full stop, whereas in the south of Spain and in the Balearic islands and Canaries, rates of infection are really low, in fact, lower than the British average,” John Hays said.
He said the policy was a “crude bludgeon” compared with the more targeted approach taken by Germany, which has barred travel to affected regions.
Hays Travel rescued the jobs of 2,500 Thomas Cook staff last year when the tour operator collapsed and had been optimistic about avoiding pandemic-related cuts.
However, after a board meeting on Friday, Hays Travel concluded that the impact of the fresh travel restrictions meant they could no longer avoid job losses, the first significant redundancies in the company’s 40-year history.
The Sunderland-based business said the cuts would affect 344 people training as travel consultants and a further 534 who work in the company’s foreign exchange business.
The Hays said changes to the furlough scheme that came into force on Monday, under which the state hands back responsibility for paying national insurance and pension contributions to employers, were also a factor.