Selfridges is in “the process of making proposed changes” to its head office, which will see its workforce reduced by 2% to counteract slipping revenues. The retailer blamed the slowdown in luxury spending on the “continued absence of a tax-free shopping scheme”.

A Selfridges spokesperson told “We are in the process of making proposed changes to some specific Head Office functions as we respond to market conditions and the evolving needs of our customers.

“The continued absence of a tax-free shopping scheme in the UK has significantly impacted international sales. Our proposals mean making around a 2% reduction in our overall headcount.”

Store staff are not at risk as part of this review. However, the proposed reduction equates to approximately 70 roles across specific Head Office departments. The most recent round of job losses comes just nine months after Selfridges’ last round of layoffs.

Chief Executive Andrew Keith corroborated this, warning in a memo to staff that the latest round of redundancies was due to the scrapping of tax-free purchases for international visitors, according to The Times.

The loss of VAT-free shopping for international visitors has impacted sales at the luxury department store which relies heavily on purchases made by affluent foreign shoppers.

Retailers have urged the government to reinstate tax-free shopping for tourists after it was scrapped in 2021 with bosses warning that international visitors are choosing to spend their money in Paris, Milan or Barcelona over London due to the tax-free incentives.

This comes after British luxury retailers including Mulberry and Burberry warned the industry about the dangers VAT-free shopping for tourists. Last week, Mulberry reported that its revenues declined by 4% in the fiscal year, reflecting weak demand for its products as luxury spending slows. Similarly, Burberry issued a profit warning, putting it at risk of a takeover since losing a fifth of its value since the beginning of 2024.

With luxury spending slowing, Selfridges has attracted interest from Middle Eastern and Chinese investors as the financial woes of the department store’s co-owner triggered a battle for the business.

Fellow co-owner Central Group is exploring ways to take greater control of the department store chain. The Thai conglomerate wants to buy out Signa’s remaining stake in the retailer with another partner. It is in talks with several sovereign wealth funds and tycoons about a potential partnership.

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