Harrods plans to let go of nearly 700 workers after being hit hard by the coronavirus crisis.
The British luxury retailer said Tuesday it expects to lay off 14% of its roughly 4,800 employees.
More from Footwear News
“The necessary social distancing requirements to protect employees and customers is having a huge impact on our ability to trade, while the devastation in international travel has meant we have lost key customers coming to our store and frontline operations,” CEO Michael Ward told staff in a Tuesday memo.
Like other nonessential retailers, Harrods was forced to close its doors in mid-March as the coronavirus pandemic began to amp up in the United Kingdom. The retailer’s flagship in London’s Knightsbridge was closed for nearly three months.
In an effort to shed excess inventory, Harrods in late May announced plans to open its first outlet store in Westfield London. Harrods also said the outlet would take pressure off the Knightsbridge flagship, which reopened with significant social distancing measures in what is usually a busy sales season for the retailer.
“Harrods Outlet allows the business to adapt to changed circumstances and grow in undoubtedly challenging times for the economy. The concept store has been designed to support higher levels of social distancing by allowing more space for customers, enabling a wider product selection of new-season product in the Knightsbridge store, as well as supporting the business in retailing existing stock in a responsible and sustainable way,” the company said.
Overall, the British fashion economy has been hit hard by the coronavirus crisis, with fast-fashion labels Oasis and Warehouse as well as department store chain Debenhams falling into administration during the pandemic. Similar to Harrods, London-based label Mulberry made the decision last night to cut a portion of its staff, announcing it would shed approximately 25% of its workforce.
In May, the Office for National Statistics announced that the U.K.’s gross domestic product shrank by 2% in the first three months of the year, marking the largest decline since the 2008 financial crisis. In March alone, the economy fell by a record 5.8% — the biggest monthly drop since record-keeping began — as the pandemic forced the government to impose strict lockdown measures.