Just three days in to August, and therefore three days after the Government began tapering its furlough scheme, and major British businesses have already announced 4,500 job losses.
Some 1,700 of those will come from DW Sports, which yesterday revealed that it would be closing all of its remaining 50 retail stores for good. Other major job losses have been announced at Dixons Carphone, Pizza Express and Hays Travel.
It is an ominous start to the month and with footfall on the British high street down more than 40% year on year with an even starker picture in London, it seems highly likely that there will be more pain to come.
Just yesterday, Pink Shirtmaker announced it was closing its London flagship store on Jermyn Street as foot traffic and tourism in the capital remained so low. The LVMH brand re-opened the store in accordance with Government guidelines on 15 June but found it simply wasn’t worth staying open.
It’s a stark reminder that even if stores made it through the lockdown period and have re-opened, there’s no guarantee that will remain the case. When it comes to job losses overall across British business, research by the PA news agency shows the rate of redundancies slowing from May to July (with 36,000 job cuts announced in May, 30,000 in June and 26,000 in July). However with employers now obliged to contribute more towards furloughed staff costs that figure could move back onto an upwards trajectory.
In addition, as support with rent and other costs also starts to to taper, retailers are likely to bite the bullet on some tough decisions that they had been delaying, perhaps in the hope that trading might pick up over the summer as lockdown restrictions ease. But with Boris Johnson having applied the breaks on re-opening more of the economy and placing tougher restrictions on parts of the country where COVID-19 infections have been on the increase, a rapid, so-called V shaped, recovery is highly unlikely.
It’s clear the attrition is far from over and the affects are being felt, not just by companies that were already distressed, but by formerly healthy businesses such as Harrods and Selfridges, which is all the more worrying. Speaking recently at an event organised by stockbroking firm Jeffries, Harrods boss Michael Ward, said he did not anticipate a recovery until a vaccine was delivered and tourism could start up again.
According to the British Fashion Council, which commissioned a study by Oxford Economics, some 240,000 jobs in the fashion supply chain are at risk as a result of the crisis. A large number of those may well come from retail. The council is calling upon support from the Government to help retailers renegotiate with landlords (who themselves are in turmoil) to ensure we don’t see swathes of closures across the country.
Of the major fashion retail businesses to have announced job cuts or at risk roles since the UK was placed under lockdown at the end of March, we count at least 14,000 roles already confirmed as lost or at risk with several hundreds more (where the companies concerned have not confirmed exact numbers) to be added to that figure from these companies below, and thousands more from smaller retailers and brands making smaller amounts of jobs cuts.
Fashion retail jobs lost or at risk since the start of the COVID-19 crisis
March 31 – Laura Ashley – 268
April 17 – Debenhams – 422
April 21 – Cath Kidston – 900
April 30 – Oasis Warehouse – 1,800
May 19 – Antler – 164
May 21 – Clarks – 900
May 28 – Debenhams (in second announcement) – “hundreds” of jobs
June 1 – Aldo UK – unknown number
June 5 – Victoria’s Secret – 800 at risk
June 8 – Mulberry – 375
June 10 – Monsoon Accessorise – 545
June 10 – Quiz – 93
June 23 – Shoe Zone – unknown number of jobs in head office
June 30 – TM Lewin – 600
July 1 – Harrods – 700
July 1 – Arcadia – 500
July 7 – Pentland Brands – 350
July 7 – River Island – 250
July 9 – John Lewis – 1,300 at risk
July 15 – Johnsons Shoes – 79
July 16 – Burberry – 150 in UK, 350 overseas
July 17 – Oliver Sweeney – unknown number lost after five stores closed
July 19 – Ted Baker – 500
July 19 – Harvey Nichols – unconfirmed number at risk
July 20 – Marks & Spencer – 950 at risk
July 28 – Selfridges – 450
July 28 – Baird Group – 264
July 29 – Hotter Shoes – “a number” of jobs lost due to 46 store closures
August 3 – DW Sports – 1,700 at risk
August 3 – M&Co “hundreds at risk”
Total UK jobs gone or at risk 14,060 + hundreds more “unknown”
Of course, on the plus side many brands are seeing strong digital growth (global retailer Mango has said that it will grow sales this year in spite of the crisis in large part thanks to a huge spike in digital sales) but for British retailers this is unlikely to make up for lost store sales, so further closures are inevitable.
According the British Retail Consortium (BRC), retail vacancies hit 12.4% in the past quarter (only a tiny increase on the prior quarter when they were at 12.3%) but it is braced for a spike of closures now Government support is being pulled back.
While the gradual shift away from physical stores was an inevitability in the long term, such a short sharp shift could have devastating affects on communities, as well as jobs, says BRC CEO Helen Dickinson, and action needs to be take to avoid that now.
“Covid has accelerated many of the changes in retailing already under way. Online continues to grow and retail stores should also have a vital role in our communities, supporting jobs and other businesses which rely on retail footfall.
“The shuttering of too many shops on our high streets will threaten the vibrancy of town centres and damage local economies,” she says.