Tesco PLC (LON:TSCO) plans to shut its loss-making clothing and homewares website, Tesco Direct, with the supermarket group admitting it could not see a way to make it profitable.
The website, which was launched in 2006 in an attempt to take on Argos and Amazon, will cease trading on July 9.
The move puts about 500 jobs at risk and means the closure of the distribution centre at Fenny Lock, Milton Keynes, that handles Tesco Direct orders.
“This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future,” said Charles Wilson, who recently took over and the head of Tesco’s UK business.
“We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform.”
Tesco has been operating two websites – Tesco.com for its grocery home deliveries and Tesco Direct for its homewares and clothing, including its own F&F brand.
However, Tesco Direct has come under pressure from the high cost of fulfilling orders and online marketing as well as a weak UK consumer environment.
Chief executive David Lewis has been carrying out a major overhaul of Tesco since taking over the reins in the wake of a 2014 accounting scandal.
READ: Tesco posts 28% rise in underlying operating profits as turnaround under Dave Lewis continues
The restructuring has included the sale of a number of businesses, the closure of poor performing stores and job cuts.
Last year Wilson led Tesco’s deal to buy wholesaler Booker for £3.7bn.
