PREMIER Foods, the maker of Hovis bread, announced yesterday it is to close two bakeries and axe 900 jobs as part of plans to overhaul its troubled bread division and pay off debt.
The company said bakery sites in Birmingham and Greenford will close during the course of next year, on top of the previously announced planned closure of another Hovis bakery in Hampshire.
It is also preparing to shut distribution sites in Birmingham, Greenford, Mendlesham and Plymouth, resulting in a total of 900 jobs being cut across its bread business.
Chief executive Michael Clarke said “decisions will not be taken lightly but they are necessary if we are to build a strong and successful future for the bread division”.
Premier, which also makes Mr Kipling cakes and Loyd Grossman sauces, said the restructuring will help offset margin pressure caused by the loss of a £75m contract with the Co-op.
The bread arm, which the group separated into a new division in August, has proved tricky for Premier, which has had to manage high wheat prices, costly logistics, and also Britons eating fewer sliced loaves prompting retailers to drop prices.
Premier said the closures will result in a £28m charge that should be recovered through site disposals.
The group has been selling non-core businesses such as Hartley’s jams and its pickles and sauces arm to help cut its debt pile.