Jersey retailer Play.com closes direct retail business

Play.com is pulling out of Jersey and moving the remaining 200 staff to Cambridge

Online retailer Play.com is to shut down its retail business to become a marketplace-only, from March.

The Jersey-based firm blamed the move on the ending of Low Value Consignment Relief, which allowed items less than £15 to be sold to the UK VAT-free.

All 147 staff in Jersey are to be made redundant as well as 67 in its Cambridge and Bristol offices.

Play.com will now become more like a shopping centre, no longer selling directly to customers.

The Low Value Consignment Relief (LVCR) loophole was closed by the UK government in April 2012.

'Hammer blow'

In a statement Play.com said: "Moving forward we are intending to focus exclusively on our successful marketplace, which is our main business area, and to phase out the direct-retail part of our business."

A spokesperson confirmed the changes meant they were completely pulling out of Jersey, but about 200 staff would be left in the restructured company, which will be based in Cambridge.

Jersey's Economic Development Minister, Senator Alan Maclean, said now in total about 600 people had lost their jobs in the island because of the end of LVCR.

Senator Maclean said: "I'm saddened, this is a Jersey business, set up in the island that did extraordinarily well, that became a global brand.

"We will work with other businesses and entrepreneurs to help them develop the next Play.com."

He said the government would do all it could to support those out of work.

David Warr, president of Jersey's Chamber of Commerce, said it was another hammer blow to the island's economy.

He said: "That's a significant increase in the number of people unemployed... and obviously that should be a concern to everyone.

"I think we are going to have to work very hard to find these people new places to work."

Garry Todd, a tax analyst, said LVCR ended almost a year ago and most businesses that would close have, indicating Jersey is through the worst of it.

In September 2011, Play.com was taken over by Japanese e-commerce operator Rakuten.

It paid £25m ($39.3m, 28.6m euros) for the company, which at the time had 14m registered users and was one of the largest online retailers in the UK.