The retail industry continues to be hit hard by bankruptcies.
According to a new report by Challenger, Gray & Christmas Inc., retailers trumped all sectors in the United States with the most job cuts, losing 77,475 employees year to date — with more than 48,700 of those due to bankruptcies.
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“The sectors with the highest number of cuts this year were all dealing with trade concerns, emerging technologies and shifts in consumer behavior,” added VP Andrew Challenger.
The global outplacement firm cited bankruptcies as one of the leading causes of job cuts among all industries: Overall, American employers have announced more than 62,100 bankruptcy-related job losses in the past 12 months, or 10.5% of all cuts — marking the highest level of job losses due to bankruptcies since 2005.
Companies across all industries tracked also blamed restructuring for majority of their job losses totaling nearly 138,000, while another 130,700 or so cuts came as a result of company or unit closures. One other reason was trade difficulties, contributing to a loss of almost 11,700 jobs, and tariffs accounted for less than 5,900 cuts, per the report.
However, of the roughly 592,500 losses last year, nearly 127,700 cuts occurred in the fourth quarter. That marked the lowest quarterly total since the 120,800 in 2018’s Q3 and 26% lower than the prior year quarter’s 172,600. (Retailers also announced 886,500 hiring plans in 2019, almost 789,800 of which were seasonal.)
“Confidence was high heading into the last month of the year,” Challenger said. “With some resolutions occurring in the trade war and strong consumer spending in the fourth quarter, companies appear to be taking a wait-and-see approach as we head into 2020.”
The retail landscape has undergone seismic changes in the last decade, with bankruptcies and liquidations hitting everyday-day-low-price mainstay Payless ShoeSource, luxury department store Barneys New York and fast-fashion chain Forever 21 in the past year alone.
Even retailers that are performing well financially are trimming their physical footprints to focus on profitable stores and direct further resources to e-commerce. Target has turned to opening smaller format stores with plans to remodel hundreds of its larger locations, while Foot Locker continues to shutter outposts every year since 2014.
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