Loss-making Rentokil unit axed

Rentokil Initial has announced the closure of its loss-making UK linen and workwear operations of Initial Hygiene UK with the loss of 1,700 jobs.

The company said that it wished to focus on its market-leading UK washroom and mat business.

Rentokil announced in 2004 that the decision to exit the loss-making operations of Initial Hygiene has been taken due to underinvestment and a "flawed commercial strategy."

The operation will close on April 30, 2006.

A full consultative process with customers and affected employees will begin immediately, in an effort to ensure continuity of service with alternative suppliers and to minimise the potential redundancies resulting from the closure.

Doug Flynn, Chief Executive of Rentokil Initial plc, said: "Our UK linen and workwear activities have sustained considerable losses for several years and the need to exit this operation has been clear for some time.

"It is always a difficult decision to close an operation, especially one that employs so many people. We are committed to doing all we can to minimise the level of redundancies and to support all our employees and customers affected by the closure.

"Today’s announcement does not impact our linen and workwear operations in continental Europe where we have built up a number of profitable and growing businesses. In the UK our focus is now on delivering the opportunity we have in washrooms and dustmats by improving efficiency and service to our customers."

The Rentokil linen and workwear operation currently employs some 2,000 people across the UK and up to 1,700 positions could be axed.

The company will continue to develop its UK washroom and dustmat business, Washroom Solutions UK, which it said had "a strong and profitable market position".

Rentokil said it had considered selling the business, but uncertainty in terms of timing, costs and the eventual exit, had meant this was not a viable option.

Customers of the UK linen and workwear services have been notified of the decision and Rentokil said it will provide comprehensive support in sourcing alternative supply.

(SP/KMcA)