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Oct 11, 2021
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Cost-cutting Hammerson's MD Bourgeois "to depart", will cut HQ jobs - report

Published
Oct 11, 2021

Hammerson’s UK and Ireland managing director Mark Bourgeois is preparing to leave as the heavily-indebted commercial property giant plans to cut up to 40 head office jobs, a report claims.


Bullring


Mark Bourgeois, who has served as MD for four years, will be leaving in the coming weeks, according to The Times. Although Hammerson has yet to comment on his departure, his responsibilities will be split between Harry Badham, who joined in April  to oversee the development teams working on "destination repositioning”, and chief operating officer Grégoire Peureux.

In a drive to cut costs, the Bullring shopping centre and Bicester Village Designer Outlet owner has placed 250 staff in a consultation exercise affecting a variety of functions at its London, Kings Cross headquarters and Reading offices.

Hammerson, which paid its 538 staff £48.9 million last year, has long been regarded in the property industry as a top-heavy organisation, the report noted.

In May, Hammerson appointed management consultants McKinsey & Company to advise on its ongoing strategic review. Then in August, chief executive Rita-Rose Gagné announced her intention to slash Hammerson’s costs by 15-20% by 2023.

Hammerson said: “We are working on an organisation review, which will create a more agile and efficient business focused on our assets, occupiers and customers.”

The latest announcements cuts come after a brutal 18 pandemic-hit months in which Hammerson’s retail-heavy property portfolio suffered with non-essential store lockdowns and a slow recovery since the spring reopening.

Despite the company reporting adjusted earnings rose to £20.1 million for the six months ended 30 June, from £17.7 million a year earlier. However, for the 12 months to 31 December, Hammerson reported a record £1.7bn loss. 

Currently valued at £1.39 billion, the company has net debts of around £1.9 billion.

It raised £552 million last August through an emergency rights issue and £274 million through the sale of its stake in European shopping villages business VIA Outlets. This year, another £330 million was raised through the sale of seven retail parks to private equity giant Brookfield. 

The company has also been cutting rents for its retail tenants by with Bourgeois saying that “typically, we're resetting our rents to more affordable levels. We reckon across the board and our business we'll probably reduce rents from their peak by about 30% so we are really doing our bit as are all landlords to make sure we maintain vibrancy in these centres”.

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