British upscale department store Selfridges continues to cut jobs due to the UK government’s decision not to reintroduce tax-free shopping, hindering efforts to stimulate luxury spending and support the hospitality sector.
According to The Times, the upscale department store chain is set to cut approximately 70 more positions at its headquarters. CEO Andrew Keith attributes these new redundancies to the government’s elimination of tax-free shopping for international tourists. These job reductions follow those made nine months ago and are exclusive to the head office, with no impact on store staff confirmed by the company.
Selfridges has stated that the absence of a tax-free shopping scheme in the UK has significantly affected international sales, leading to proposed job cuts of roughly a 2% reduction in overall headcount. Approximately 70 positions across specific head office departments are targeted for reduction, although the company aims to provide redeployment opportunities for those affected. CEO Andrew Keith emphasized in a staff memo that external challenges cannot be ignored, citing slower-than-anticipated growth in online luxury post-Covid and the need to prioritize the company’s technology and digital strategies.
The impact of removing VAT-free shopping isn’t limited to Selfridges alone, as other luxury brands in the UK like Mulberry and Burberry have also been affected. They’ve cautioned that the decision has had negative consequences for the sector, resulting in decreased sales within the UK. Reports indicate that a significant number of shoppers have shifted their spending to countries like France, Italy, and Spain, where tax-free shopping is still an option. Additionally, some UK consumers have opted to shop abroad as well.
Selfridges, also known as Selfridges & Co., is a chain of upscale department stores located in the United Kingdom. Operated by Selfridges Retail Limited, it is part of the Selfridges Group. Established by Harry Gordon Selfridge in 1908, its flagship store at 400 Oxford Street in London, designed by Daniel Burnham, is renowned as the second-largest shop in the UK, following Harrods. This flagship store opened its doors on March 15, 1909. Additional Selfridges stores are situated in Manchester at the Trafford Centre (1998) and Exchange Square (2002), as well as in Birmingham at the Bullring (2003).
