Johnson Service Group (JSG) is bringing to an end its 199-year association with the dry cleaning industry via an £8m sale of its remaining stores to Timpson.
Timpson will become the country’s largest dry cleaner with a market share in excess of 20% as Johnson’s 200 stores add to its existing 520 dry cleaning locations in an industry with an estimated 3,000 outlets nationally.
In 2004 Johnson paid Timpson just £1 for 109 stores but has been shrinking the size of its estate in recent years as it refocuses investment on industrial scale laundry sites which clean and rent out linen for corporate clients.
Less than 10% of Johnson's annual profit was delivered through its retail dry cleaning unit in 2015.
TOUGH MARKET
Johnson’s dry cleaning unit, which includes the Johnson Cleaners and Jeeves of Belgravia brands, generated sales of £46m and £2m of adjusted operating profit in 2015.
Johnson announced it would close 109 underperforming outlets at a cost of £6.5m in 2015 and it is still on the hook for any further costs related to stores which closed prior to 30 June 2016 under the terms of the deal with Timpson.
In its last financial year, Johnson earned £28m in underlying operating profit, highlighting the dwindling importance of retail at the Warrington-headquartered business.
Separately, in a trading update today Johnson chief executive Chris Sander said performance in the year to 31 December was slightly ahead of expectations driven by underlying growth and good execution following a sequence of acquisitions.
Shares in Johnson Service trade 1.3% higher at 115p.
