Less stock, less products and less buildings will form key parts of Headlam’s turnaround plan.
The group says that in seeking new markets it has only generated low margin or loss-making revenue while ‘disappointing’ core independent retail and contract customers.
Stephen Bird, Headlam interim executive chairman told analysts at a meeting this morning that there had been a ‘historic lack of urgency to address problems combined with poor commercial implementation and decision making in recent years.’
He says his strategy will restore profitability in 2027, regardless of the state of the flooring market.
The group says that the past month has seen ‘senior management change with greater flooring experience; ongoing, multiple supplier discussions; stock levels reducing following implementation of fully centralised buying: network optimisation has presented further surplus property disposal opportunities and the development of a clear path back to profitability without requiring any market recovery.’
The plan aims to see the group ‘refocus and grow with independent retailers and contractors’; eliminate loss- making revenue elsewhere; consolidate its purchases and leverage its scale as the UK and Europe’s largest purchaser of flooring; reduce footprint further reflecting the revised business model; improve stock availability and delivery reliability and improve stock turn and reduce SKUs.’
Further details of the plan, as outlined to analysts, are due to be confirmed this afternoon.
