Magnet owner to close “underperforming” UK stores

Following news that it was closing its Halifax manufacturing facility, Nobia – the parent company behind Magnet Kitchens – has now announced plans to close “underperforming” stores in the UK.

The company says the move is part of its transition to “an asset-light model in the UK”, and that the closures will affect stores that are up for lease renewal.

Nobia believes that these measures will result in annual savings of approximately SEK 160m (approximately £11.9m), which it estimates will reach full effect by 2025. However, the company says that the total cost of these changes will likely amount to around SEK 180m (roughly £13.4m).

Nobia says that due to continued low volumes of new construction across the Nordic region, demand from project customers remains low. As a result, it is implementing cost-reducing measures in the Nordic supply chain. According to Nobia, these measures are “mainly related to reduction of indirect staff and external warehousing”.

There is currently no word on which UK stores will be impacted by the plans, but Nobia says that it will communicate further details when the company releases its Q2 results next month.

In January 2023, Nobia first announced its plans to potentially close some of its UK sites. The company said the UK has turned in a ‘weak performance’ and it planned to undertake a ‘repositioning’ as part of a wider cost reduction programme. At the time, the company proposed closing production sites in Dewsbury, Yorkshire and Grays, Essex.

Around this same time, Nobia said it had no plans to close any of its UK Magnet stores, but did reveal that some redundancies had been proposed.

The company also reported a massive fall in its most recent end-of-year results, with operating profit down by more than 150%. In 2022, Nobia ended the year with operating profit of SKr 191 million (£14.6m). However, in its 2023 figures, this plummeted to a loss of SKr 99 million (£7.3m).

Despite the proposed closures, earlier this month Magnet opened its first ever franchise store, which is in Tunbridge Wells, Kent.

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