GUS dissolves e-tail division

Great Universal Stores' (GUS) £35m ecommerce division has told staff at its Glasgow headquarters that few of them will have jobs to return to on Monday morning, silicon.com can exclusively reveal.

No exact figures have been released on the number of redundancies, but the ecommerce arm - called Reality Solutions - employs between 40 and 45 staff in its Glasgow office, down from a total of 75 at its peak.

The company is pitching the redundancies as part of its "re-focus", pulling the ecommerce arm further into the more profitable call-centre and logistics businesses.

Reality Solutions is now in a 30-day "consultation period" with the affected staff and claims it is making every effort to re-employ them in other areas of the division, although it admits these will probably be based outside Glasgow.

Reality was founded in 1999 by Scottish entrepreneur of the year, Chris Gorman. GUS bought the web design and e-solutions business last spring in a £35m deal. After the buyout, Reality's internet services were partnered with GUS' existing call-centre and logistics business. The bulk of Reality's 20,000 UK staff are employed in those areas.

The move marked the retail group's determination to position its brands, including Argos and Burberry, as online trailblazers, and fight off competition from its main rival, N Brown.

In June, the Reality division reported an operating profit of £5.1m for its first year trading - but no breakdown was provided as to how much the ecommerce arm contributed.

Jim Foley, the recently appointed managing director of Reality Solutions, is in the process of shifting the company's focus from servicing the dot-com sector to providing ebusiness solutions to bricks-and-mortar companies such as the packaging group Macfarlane.

GUS refused to comment, referring all questions to Reality.