Business

Saturday 16 December 2017

More than 200 post offices to close in An Post overhaul plan

An Post's restructuring plan to seek far more closures than previously thought, writes Samantha McCaughren

Businessman Bobby Kerr
Businessman Bobby Kerr
Samantha McCaughren

Samantha McCaughren

A plan by An Post to restructure the post office network is expected to require the closure of over 200 post offices, the Sunday Independent understands.

The organisation is formulating a strategy to ensure the long-term future of the network and is likely to spin out the post offices into a separate, stand-alone retail business unit within An Post, according to a number of sources.

It emerged last week that a separate government report, written by businessman Bobby Kerr, proposed that 80 post offices would be closed and a further review of loss-making post offices be carried out in four years' time.

However, the sources said that An Post's strategy would be to use any funds to restructure the business now, closing a multiple of the 80 post offices proposed by Kerr. It would be expected that several post offices would close voluntarily with some form of compensation being paid, but that An Post would also identify locations to be closed over an extended period.

In addition to the closures, a significant number would be moved to convenience shops in villages and towns.

The strategy has been informed by work by consultants McKinsey, who were appointed to review the business by new An Post ceo David McRedmond. The plan has yet to go to the board.

While cost-cutting is part of the plan, there are also proposals to grow aspects of the operation. The mail and parcels business would be another stand-alone operation. New services are being explored for the parcel business, which has a turnover of around €120m and is rapidly growing.

While Kerr has proposed 80 closures, Ned O'Hara, general secretary of the Irish Postmasters' Union suggested that the company could seek as many as 400 or 500 closures, but it is unlikely to be as high as that. There are almost 1,150 post offices at present.

O'Hara said that McKinsey had been tasked with finding business solutions to the problem but was not tasked with addressing the community and social services side of company, which is a concern.

This weekend, McRedmond sent a letter to postmasters stressing the urgency of the plan.

"We cannot and I do not want to delay the necessary fundamental restructuring decisions until 2020. Rather, we can complete the work now to ensure that we have a sustainable future for the business," he said, adding that major decisions would be made before the summer.

Sunday Indo Business

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