Collapse of UK retailer DW Sports puts 1,700 jobs at risk

[LONDON] DW Sports, founded by former English soccer player David Whelan, expects the appointment of administrators on Monday after the company had to close dozens of its gyms and retail stores due to the Covid-19 pandemic, according to an emailed statement on Monday.

The UK retailer and gym operator has 1,700 staff and has already closed 25 of its 75 retail sites in recent weeks. The remainder will continue to trade during administration. While DW Fitness First gyms will be included in the restructuring, Fitness First remains a separate entity and its 43 gyms are unaffected by the proceedings, the company said.

Job losses in the UK are piling up, with engineering firm Senior announcing a reduction of an additional 620 positions today. The rising number of insolvencies is becoming a problem for retailers' creditors and landlords alike. HSBC said today it put aside US$8 billion to US$13 billion for bad loans this year, while UK mall operator Hammerson is considering raising new funds through a rights issue.

DW Sport's chief executive officer Martin Long said in the statement, "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."

The move highlights the misery for many UK retailers who have seen their sales plunge after lockdown measures forced shoppers to stay at home.

Furnishing and fashion chain Laura Ashley, restaurant chain Carluccio's and rent-to-own retailer Brighthouse all collapsed into administration since March. Shirt maker TM Lewin said last month it will close all its stores and cut 600 jobs.

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