FORMER Dragons Den star Theo Paphitis is mounting a rescue for some of the Post Offices’ biggest branches.
The Post Office has announced a major change to its remaining 108 owned branches in an effort to save them from closure.
The company will switch the big city branches, sometimes called "Crown Post Offices" to a franchise model and hopes to strike a deal with new owners by the end of September.
In November fears were sparked that the Post Office could close its loss-making branches in a move that would cut hundreds of jobs.
The 108 branches are currently losing £40million a year, despite only accounting for 1% of the business.
However, the Post Office said that the franchise plan will mean towns "that currently have a Directly Managed Branch in their area will continue to be able to access Post Office services".
Read more in money
It is understood the majority of these branches will continue running at their current sites, but that some of these could face closure as franchises are moved to different premises, affecting staff.
Franchising is a business model where a company (the franchisor) grants permission to an individual or group (the franchisee) to operate a business using its brand, products, and processes in exchange for a fee.
It is understood that there have been 4,000 applications to take over the 108 branches from 500 different groups of bidders, including existing Post Office franchise owners.
Tesco is in the running to take over some of the larger branches, but not all of them.
Stationery retailer Ryman, owned by entrepreneur Theo Paphitis, is also understood to be interested in acquiring some of the Post Office branches.
Ryman already offices Post Office services in six of its 237 branches. Mr Paphitis did not respond to a request for comment.
Nigel Railton, Post Office chairman, said that the £40million of savings will be funnelled into increasing postmasters' pay by 10% as promised last November.
The Post Office remains in discussions with the government regarding this year’s funding and is believed to have secured the majority of the required financial support.
Mr Railton said: "Moving to a fully franchised network is one part of enabling the Post Office to deliver a 'New Deal for Postmasters', helping to create a long-term, sustainable future for the Post Office.
"By franchising these branches, we are protecting access to our services for communities right across the UK and realising £40million worth of savings that will enable us to uplift postmasters' remuneration by up to 10%."
Further details on proposals will be shared with local communities and stakeholders for individual branches in the coming weeks.
TROUBLED TIMES
It comes after it was revealed that government ministers are exploring plans to transfer ownership to employees, similar to the model used by the John Lewis Partnership.
It is based on the idea that its workers are each part-owners of the company and receive a share of annual profits.
Whitehall insiders admitted that the Post Office is in a lot of trouble and is only financially viable because of an annual subsidy it receives from the government.
Calls for a review of the company's ownership model have grown amid rising public anger at the wrongful conviction of hundreds of sub-postmasters.
Highlighted by the ITV drama Mr Bates vs The Post Office, it has been labelled Britain's biggest miscarriage of justice after they were accused of stealing cash from their branches.
Read More on The Sun
Many had their lives destroyed, were imprisoned, and some even passed away or committed suicide before finally being exonerated.
Former sub-postmaster Sir Alan Bates, who tirelessly campaigned for justice, is still waiting to agree on a compensation settlement and has called on the government to consider suing former directors of the company.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun's business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open.
The British Retail Consortium has predicted that the Treasury's hike to employer NICs from April 2025, will cost the retail sector £2.3billion.
At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.
In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
In some cases, stores have been shut when a retailer goes bust, as in the case of Carpetright, Debenhams, Dorothy Perkins, Paperchase, Ted Baker, The Body Shop, Topshop and Wilko to name a few.
What's increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.
The Centre for Retail Research (CRR) has warned that around 17,350 retail sites are expected to shut down this year.