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Centrica closing up shops
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July 19, 1999: 11:24 a.m. ET
'Intense' competition forces U.K.'s largest gas supplier to close its 243 stores
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LONDON (CNNfn) - Centrica, the U.K.'s largest gas supplier and retailer, said Tuesday it will close its nationwide chain of stores but plans to continue offering gas appliances via home shopping facilities.
The company made the decision after it failed in its attempts to turn the money-losing unit around. Last year, the division's 243 shops lost $49.5 million on revenue of $262 million. Centrica said first-half 1999 losses for its town center-based retail unit already had reached $39 million.
"Trading conditions have been very difficult for an extended period, exacerbated by intense competitive activity," the company said.
Town center retailers in the U.K. have come under increasing pressure in recent years with the increase in the number of U.S.-style malls. Centrica found it couldn't compete with the larger domestic appliance retailers, which were building huge out-of-town superstore networks across the country.
"Our locations were wrong for this sort of business," a Centrica spokesman told CNNfn.com.
Centrica estimates the closure costs at $93 million. The process is expected to be completed by the end of August and will affect up to 1,445 employees.
The company said it will seek to find new positions for "as many staff as possible" in the company's other activities.
Centrica is the U.K.'s largest domestic gas supplier and recently agreed to buy the Automobile Association, the U.K.'s No. 1 vehicle recovery organization, in a $1.7 billion deal.
Centrica's shares fell 1.9 percent to 142 pence in London. 
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Centrica
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