Thousands of Fashion and Retail Jobs Could Be In Jeopardy
Job cuts in the fashion and retail sectors have been ongoing the last 18 months, and the numbers getting bandied about are stark.
In January alone, at least 18,517 fashion and retail jobs are believed to be in jeopardy. That number could be three times the estimated 4,686 known jobs cut from July through December in 2023, which doesn’t include the still to be quantified cuts at Nike Inc. The company said in December it plans to save $2 billion over three years in a move that includes streamlining the organization.
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Other layoff announcements in the back half of last year include 558 from the closing of a Stitch Fix distribution hub in Dallas, 800 in the Zulily shutdown, 500 as part of a restructuring at VF Corp., 600 to 700 in the Nien Hsing Textile Co.’s factory closure, 800 positions at Farfetch in the U.S. and U.K., 126 manufacturing jobs at Kayser-Roth at its Lumberton, N.C., facility, as well as 250 corporate roles at Hanesbrand in a reorganization expected to save it $15 million annually. The cuts are on top of job losses in the first half of 2023, which include the 1,800 shed at Gap Inc. last spring.
The workforce turmoil in fashion and retail is expected to continue in 2024 as companies retrench, whether they cut stores, exit certain markets or even go belly-up.
British fashion retailer Superdry is reportedly working with PwC on its restructuring options as it eyes store closures and job cuts amid a liquidity crunch due to weak sales. And the operator of Berlin’s department store KaDeWe, the high-profile tourist stop, filed for insolvency last week. KaDeWe Group also operates Oberpollinger in Munich and Alsterhaus in Hamburg. The business is majority owned by Central Group of Thailand, with Austrian property group Signa a minority stakeholder.
Central and Signa also partnered to acquire the Selfridges department stores in the U.K. in 2021. Central, Thailand’s largest department store owner and controlled by the Chirathivat family, took over control of Selfridges—including Brown Thomas & Arnotts in Ireland and De Bijenkorf in the Netherlands—as Signa’s financial troubles grew. Signa’s troubles also resulted in the insolvency of Galeria Karstadt Kaufhof, Germany’s remaining department store chain, on Jan. 9. Galeria, the product of a merger of former department store rivals Karstadt and Kaufhof, operated 92 stores and counts about 15,000 employees. The filing is the third one in nearly four years, and it is unclear how many jobs or stores might be cut from the latest bankruptcy round.
The 18,517 tally doesn’t include job losses in warehousing, which is expected to be the next wave in retail job cuts as investments in technology and automation kick in.
But warehousing isn’t the only area within supply chain logistics where jobs are falling. Many jobs in trucking and logistics, which clearly impact retail, began last August when Yellow Corp. shut down, resulting in the loss of 30,000 positions. As the transportation sector consolidated, there were other losses too, such as the 3,500 job cuts at Danish container shipping and logistics firm Maersk.
Thus far this year, last-mile delivery provider Veho said it will lay off 19 percent of its corporate employees. Other layoffs are slated at GXO Logistics and Coyote Logistics, as well as at Fanatics and Locus Robotics. And on Tuesday, United Parcel Service said it is cutting 12,000 jobs as shipping volume in the U.S. and overseas fell in the fourth quarter. The company also said it was contemplating a sale of its Coyote truck brokerage operation.
Many of the moves to cut costs, whether in fashion and retail or warehousing and supply chain logistics, are to align resources with expected needs in 2024. Should the trend continue, 2024 could become the year known for staggering job cuts. That’s based in part on current data trends from the past six months, as well as the potential for a global consumer pullback on spending later in the year.
In the U.S., S&P Global Ratings found that the probability of a U.S. recession within the next 12 months has moderated, but remains elevated. “We expect below-trend growth in the coming quarters, given a mixed bag of leading indicators,” Satyam Panday, S&P Global Ratings U.S. chief economist, said.
Despite climbing credit card debt, consumers in the U.S. are still spending. But elsewhere, the European Union’s data agency found that the EU narrowly avoided a recession in 2023. Germany saw a 0.3 percent contraction in the fourth quarter, but managed to avoid technical recession due to an upward revision to its third-quarter reading. The French economy held steady in the fourth quarter, while Spain expanded by 0.6 percent in the period. Data from the UK, which exited the EU in January 2020, won’t be available until next month. The country is believed to have a higher recession risk following a 0.1 percent decline from flat in a GDP revision for the third quarter ended September.
Below is a list of the expected job losses in retail in 2024.
Thinx
Period underwear brand Thinx is laying off 95 employees on May 1.
The information was from a state-mandated notice filed in New York on Tuesday. The filing said the soon-to-be laid off workers are located in New York City at 100 Broadway, and that the reason was due to a planned merger. Kimberly-Clark took a minority stake in the brand in 2019, and increased that holding to become the majority stakeholder in 2022. A published report in Modern Retail suggested that the “merger” is part of a greater effort to integrate Thinx “into Kimberly-Clark’s existing infrastructure.”
John Lewis Partnership
Published reports across the pond last week indicated that John Lewis could be shedding up to 11,000 jobs over a five-year period. A spokesperson for the company said its “plan to return to profit…is working and performance is improving, but as we have already announced, that sadly means reducing the number of Partners we need in our business.” Word of the number of total job cuts was first reported in The Guardian.
The staff-owned company—its members are called Partners—warned last March that it would need to cut staff and scrap bonuses. Revenues have been on the decline as consumers pull back on their spending. The retailer last year closed 16 department store locations. The company said in a statement in September when it posted first-half results that the planned turnaround could take “a further two years” longer than planned due to a “combination of inflationary pressures and greater than expected investment requirements for our transformation.” That brings its target date to 2027-2028, instead of 2025-2026 as initially planned.
Fruit of the Loom
The American apparel and underwear maker is closing its South Carolina distribution center in Summerville, resulting in the loss of 119 workers.
The layoffs are expected to be completed by July 1.
The Kentucky-based company, which owns Spalding, Vanity Fair, and Russell Athletic, said in a statement that it is “constantly analyzing its business to ensure we remain as competitive as possible.” The company said the closure is “in support of a consolidation strategy.”
H&M
H&M Group is planning to close 28 stores in Spain, or more than one-fifth of its 133 stores in the country. Those closures are expected to impact about 590 workers.
A spokesperson said in a statement that the fast-fashion chain “consistently” assess its store portfolio and that having the stores in the right locations and staying competitive was a priority. The company last year trimmed 1,500 positions from its overall workforce to cut administrative and overhead costs.
Levi Strauss & Co.
The company is cutting 10 to 15 percent of its workforce in the first half as part of a two-year restructuring plan.
The owner of the Levi, Dockers and Beyond Yoga brands has a global workforce total of about 19,000 total. About one-fifth of that is considered to be corporate roles, so between 500 to 700 positions could get cut.
The cuts were disclosed last week as the company is focused on becoming more direct-to-consumer. Michelle Gass joined the company in January 2023 as president, and took over the CEO role from Chip Bergh this past Monday.
REI
REI CEO Eric Artz said in a Jan. 25 letter that the outdoor retailer would shed 357 positions, including 200 corporate staff at its Sumner, Wash., headquarters and 121 in its distribution centers.
Artz projected 2024 revenues to be down versus 2023 and said the job cuts were “primarily driven by financial necessity.” He also described that state of REI’s business and the outdoor industry at large as “increasingly challenging and highly promotional,” adding that the outdoor specialty retail channel has been in decline for four quarters.
Boohoo Group
The fast-fashion e-tailer is set to shed 400 jobs now that it plans to shutter its Daventry distribution center in the village of Crick in England’s Northamptonshire.
The company said it is diverting its investments to other U.K. sites. It also now has a U.S. warehouse in Pennsylvania to handle stateside orders. Boohoo is also considering the possible closure of a Leicester facility, which would impact another 100 positions.
Ebay Inc.
The online marketplace platform is shedding 1,000 roles, or 9 percent of its full-time workforce.
President and CEO Jamie Iannone posted blog on Jan. 23 said the move is part of a change to “better position e-Bay for long-term, sustainable growth.” He also said that the company plans to scale back the number of contracts it has within its “alternate workforce over the coming months.” Iannone said overall headcount and expenses had “outpaced” the growth of the company’s business.
Wayfair
Home goods retailer said on Jan. 19 that it will cut 13 percent, or 1,650 employees, of its global workforce.
The cuts will include 19 percent of its corporate headcount. Wayfair CEO and cofounder Niraj Shah said in a statement that the reduction in team sizes reflects a “return to our core principles on resource allocation.”
Macy’s Inc.
The retailer said on Jan. 18 that it plans to lay off 3.5 percent of its workforce, or about 2,300 employees.
A spokesperson for the parent of the Macy’s, Bloomingdale’s and Bluemercury banners said the “reduction impacted all functions across nameplates, with the majority being corporate Macy’s Inc. jobs.” The individual said the company will continue to “reposition our store portfolio and evaluate the right mix of on- and off-mall locations, an indication that there could be more job losses down the road. Macy’s is set to close five department store locations and two furniture galleries. The retailer previously disclosed a plan to shutter 125 department store, of which 80 as of fall 2023 had closed since 2019.
Macy’s president Tony Spring, formerly the CEO of the Bloomingdale’s division, succeeded Jeff Gennette as chief executive officer on Sunday. On Jan. 21, Macy’s officially rejected a $5.8 billion, or $21.00 per share, take-private offer from Arkhouse Management and Brigade Capital Management.
Boardriders
State mandated notice requirements indicate that the brand’s distribution center in Mira Loma, Calif. will shed 139 positions, effective Feb. 4.
The layoffs are part of the company’s transition to new ownership under Authentic Brands Group. Authentic Brands said last September that it had finalized its $1.25 billion purchase of Boardriders Inc. from Oaktree Capital Management L.P. The brand management firm has been transitioning the brands under the Boardriders umbrella—Quiksilver, Billabong, Roxy, DC Shoes, RVCA, Element, VonZipper, and Honolua—to a licensing model.
Renewcell
The Stockholm-based textile recycling firm said on Jan. 10 that its planned restructuring will result in the loss of 25 percent of its workforce, or about 30 employees.
The layoffs will be primarily on the production side. The reduction in staff and operating costs are expected to result in annual savings of 35 million kronor ($3.4 million). “The planned restructuring of the organization means that Renewcell will maintain conditions for efficient production while continuing to focus on the development of sales to fiber producers as well as focusing on marketing activities to the major clothing brands that determine the final demand in the supply chain,” the Circulose maker’s acting CEO Magnus Håkansson said. While the widespread hype about Circulose gave the Inditex supplier the 2023 Nordic Council Environment Prize, the firm still needs to ramp up commitments to avoid operating in the red.
Rent the Runway
The fashion rental firm said in a regulatory filing with the Securities and Exchange Commission on Jan. 8 that it will cut its corporate workforce by 10 percent.
The layoffs, which will impact 37 employees, are expected to occur in the second quarter. The job cuts are part of a restructuring plan that it expects to result in annual savings of between $11 million to $13 million. As part of the restructuring plan, former chief operating officer and president Anushka Salinas resigned, effective Jan. 31, but will stay on in an advisory role until Feb. 29. The company’s CEO and cofounder Jennifer Hyman has taken on the role of president and is now the company’s “principal operating officer.”
