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THE BURTON GROUP PLC STREAMLINING OF OPERATIONS

 LONDON, Jan. 7 /PRNewswire/ -- The Burton Group Plc is to implement a far-reaching program of organizational and management changes designed to improve the efficiency and effectiveness of the head office functions. A program to ensure appropriate levels of staffing in the retail branches is also announced.
 The program, developed from a six-month review of the group carried out by senior management with the assistance of external consultants, will reduce the numbers employed in head office functions by 933. In the branches, a rebalancing of work schedules will reduce the need for full-time jobs by approximately 1,000, but will, at the same time, result in the creation of up to 3,000 key-time' (part-time) positions. It is hoped that the majority of full-time retail staff affected will remain with the company on a key-time basis.
 The program being implemented will:
 -- shorten lines of communication
 -- eliminate unnecessary bureaucracy
 -- standardize working methods to gain economies of scale
 -- bring customer first' focus on all operations
 -- achieve savings in key departments including Buying & Merchandising, Finance, Estates, and Personnel
 The Chairman, Sir John Hoskyns, said, "When John Hoerner was appointed as chief executive, his first priority was to correct the trading strategies of the retail businesses, and this led to the improvement in the second half results. We are now ready to change the fundamental structure of the business, not merely to reduce costs but to make The Burton Group a better company."
 Costs of redundancies are currently estimated at between 10 million pounds sterling and 15 million pounds, depending on how many retail staff opt to remain with the group. Savings during the remainder of the current year are likely to be of a similar order.
 Consequent on the organizational and management changes, Mr. Graham White will become operations director, to replace Mr. Geoff Powell who has resigned as a director and will be leaving the group. Mr. Ian Jackman will become company secretary to replace Mr. John Davies who has resigned as a director and company secretary and will be leaving the company.
 Chief Executive, John Hoerner, said, "We appreciate the demands this will make on our staff in the coming months, and particularly hope that as many as possible of our retail staff affected by the changes will remain with us. It is important to have experienced staff in the shops but also to have them there when customers want to shop."
 The average number of people employed in The Burton Group during the year to Aug. 29, 1992 was 35,964 including 17,873 part-time employees.
 Notes To Editors
 As a total business the Burton Group spends rather more than other comparable retail companies on staff and other costs as a percentage to turnover. Some higher staff cost is inevitable because of the diversity of the group and the fact that turnover is made up from 10 trading divisions. But these are not the only contributors.
 The group believes that it is very important for the trading divisions to maintain their individual marketing appeal and personality to their customers, while improving their efficiency through group economies of scale and gains from standardizing operating methods.
 Since John Hoerner became chief executive of the company on Feb. 12, 1992, the first and most important priority has been to get the Multiples trading strategies right and the progress the group has made on this front contributed to the sales and profit improvement during the second half of 1991/92 over the previous year.
 The management board undertook a comprehensive, company-wide project, starting last June, to re-engineer' the group's entire operation. Comparisons have been drawn from other businesses in the United Kingdom, in America, and between various divisions of the group.
 The project was led by the senior management. The leader of each of eight teams was in charge of an area for which they were not directly responsible in their line jobs.
 The company retained external specialists to help achieve this goal, to provide input about practice in other companies and to provide resource so the group could get the project finished in a reasonable time frame.
 Although the proposals covered the full breadth of the group's diverse and differing operations, there have been several principles common to all the Project Teams' conclusions. They include:
 1. shortening the distance between the product, the customer, and the group (to avoid preoccupation with internal matters);
 2. using standard methods and approaches across the group (to gain economies of scale and take advantage of best practice);
 3. adopting a minimum number of key financial and merchandising reports required to run the company (to avoid bureaucracy, and minimize overheads required by "reforming" information).
 4. examining everything the group does to see whether it makes a difference to customers.
 Most of these changes will take place with immediate effect.
 Buying and Merchandising
 The functions of buying, merchandising, and distribution are being split. The heads of these functions will report in to the buying and merchandising directors or managing directors.
 The buying and merchandising controller position disappears.
 The paperwork needed to operate the business will be reduced to a handful of reports.
 These changes will allow operating savings of around 20 percent. The number of product based teams in each division is being reduced by about one-third.
 Retail
 The approach to retail staffing throughout the group will be standardized. The group is taking the necessary steps in each division to get the right balance between full-time and key-time members of staff. As a result, about 1,000 full-time positions will disappear and up to 3,000 key-time positions will be created. The group expects that many full-time members of staff will convert to key-time roles, and the rewards for a regular key-timer with a flexible work schedule have been made as attractive as possible.
 The pay and benefits of all members of retail staff will be standardized between all divisions. After taking account of these improvements, re-balancing staffing to reflect customer shopping patterns will result in operating savings on an ongoing basis. All members of selling staff will be compensated according to four formally defined levels of skill which they have achieved.
 The qualifications will involve additional training as well as store/shop-based evaluations of performance.
 Personnel
 The field personnel positions will be organized according to a standard pattern throughout the Multiples businesses. This change, together with the reorganization of Debenhams' personnel function and group personnel departments will result in a 26 percent reduction in personnel staff.
 Finance
 All of the accounting functions of the group will be centralized into two centers, Leeds and Taunton. New systems will be installed to support the provision of common transaction processing services and management information to all divisions. Each operating division will retain a small analysis team who will interpret and generate plans and forecasts and will be responsible for the communication with the accounting centers. Accounting for group operations (Estates, Purchasing, Warehousing and Distribution, External Business, etc.) will be integrated into either Leeds or Taunton. The finance function is the one exception to having all the changes take place immediately with a phased program lasting six months being required due to the sheer volume of integration required. Overall, these changes will result in staff reductions of 24 percent.
 Investor Relations
 The Investor Relations department is being closed. Investor Relations will be handled by the Business Planning Controller as part of his duties in the group finance function. Press enquiries will be handled by Brunswick, the group's corporate communications consultants. Shareholder enquiries and services will be handled by the secretariat.
 Marketing
 The designers are being formally integrated into the divisions as part of the buying function, with a small central team who will, under the fashion director, support the design function in the divisions and manage trend forecasting for the group.
 The marketing function will be staffed to serve all the Multiples divisions needs. A packaging resource will be available for group-wide use. Quality Control is being centralized, retaining specialists in the divisions as part of the buying function.
 The group will continue to retain outside fashion press consultants as needed by the various trading divisions and a small group press office will support this function.
 Systems
 In order to make the B & M, finance, and retail plans work, there is a key role for systems to play. Each division will retain a systems input and co-ordination unit. All of the non-pc based systems will be in Taunton and Leeds.
 Estates
 The Estates Function will pick up maintenance for all the stores, moved over from Retail Design and Shop Development. In addition, staffing reductions of 25 percent are being made in Estates.
 Warehouse and Distribution
 Distribution schedules have been rationalized by location and frequency of delivery will be according to a group standard schedule. Warehousing procedures are being standardized between divisions.
 Supply Chain
 A new group function to co-ordinate far-east purchasing will be created. This four-person team will be based at a group office in Hong Kong.
 Pay and Benefits
 Staff benefits have been reduced throughout the business. In some cases the changes represents a straight reduction, in others, the benefit will be compensated for.
 -0- 1/7/93
 /CONTACT: David Brewerton or Karen Simmonds of Brunswick Public Relations for The Burton Group PLC, 071-404-5959/


CO: The Burton Group PLC ST: IN: SU: RCN

PS-OS -- NY038 -- 2645 01/07/93 11:55 EST
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