Business

Retail Bankruptcies Anticipate Massive Layoffs – Forbes

There is no doubt that many retailers have tried to keep their associates on the payroll. These employees worked well as a team, knew the culture of their company and had loyal customers who returned to them for service and advice.

During the pandemic period, caused by coronavirus COVID-19 things have changed and most recently companies like Macy’s

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, Kohl’s

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and Neiman Marcus and others dismissed long-term associates who have been loyal team members for some time.

Of course, we are assured by management that customer service will not be interrupted and that customers come first. However, restaurants are closed and counter service for merchandise is minimal, since most customers shop on the internet.  Stores only have about 20% of the customer traffic from before COVID-19 and the new normal is quite different from past experiences.

I have noted some major bankruptcies – I can account for 31 companies having gone to court for protection under chapter 11.  In most cases they will close some of their stores and reduce the staff in others. Because companies seek court protection while they reorganize, the human element becomes secondary to financial considerations.

Retailers are cagey about releasing staff reductions. It hurts morale and makes everyone uncertain about their own future. Nonetheless, Kohl’s announced that 15% of their employees have departed, Macy’s gave out a figure that 3,900 jobs were eliminated, Neiman Marcus announced a reduction of staff which I estimate to exceed 1,500 and I believe that JCPenney

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reduced their associate headcount during the bankruptcy proceedings by 7,500 to 10,000.

As a counterpoint to this sad news is the fact that retailers are hiring temporary help for the Christmas selling period. Kohl’s says they will have 50,000 temporary employees, Macy’s I estimate 50,000, Nordstrom

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I estimate 20,000. While these temporary jobs do not make up for the forced attrition, they do take care of customer service during the peak selling period. That service has shifted as more customers buy on-line and might want to pick up the merchandise outside the store.

Christmas sales will be different this year. The selling period will start earlier and extend for a longer period while customers will shop for more home necessities than apparel. Thursday, November 26 2020 (aka Thanksgiving) is once again a real holiday that retail workers can celebrate at home, since most of the stores will remain closed. Even Walmart

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, Target

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, Macy’s and Kohl’s will be closed on Thanksgiving, but everyone will have their e-commerce sites operating. I am predicting a meager 1 ½ % in selling increase during the Thanksgiving to Christmas period since much of the selling is anticipated to start much earlier. In addition. customers are expected to stay home as they try to avoid the virus. There is less joy to go around.

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