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Editor’s Comment: Retailers will be judged on their coronavirus actions

Kirsty McGregor

During times of crisis, difficult decisions are necessary to save businesses in the long term. But the way in which some retailers have culled staff and cancelled orders will rankle for months to come. 

Strong crisis leadership requires decisive action, and I am by no means suggesting it is easy to find a way through the coronavirus pandemic. This is an unprecedented situation – the high street has been locked down in a desperate attempt to quash unnecessary social interaction and contain the spread of the coronavirus. Most of the retailers we know had already decided to temporarily close their stores, some with tears in their eyes. 

The chancellor acted last week to avert hundreds of thousands of job losses, by offering to pay 80% of the wages of staff whose jobs are at risk. But the urgency of the situation facing retailers means many have already been forced to make redundancies or furlough staff without pay, as they look to drastically and swiftly cut costs. 

Just over one-third of respondents to our online survey last weekend told us they have had to cut back on staff as a result of coronavirus. Of those who said their businesses had not done so yet, almost half said it was being considered.

Some retail CEOs are handling this compassionately. They are fighting hard to preserve jobs or continue paying staff for as long as possible, and considering all possible alternatives to redundancies, such as redeploying staff or reducing their working hours. 

However, not every employer is taking this approach. Some appear from the outside to have dispassionately axed hundreds of jobs – sending the message that their staff are considered disposable. 

There has also been a noticeable split between the retailers that are working closely with their suppliers to come up with medium-term solutions that enable both sides to survive, and those that have cancelled orders. The latter have taken the view that it is “every man for himself” and suppliers could be pushed to breaking point as a result.

Treating staff and suppliers in such a way will leave a bad taste in peoples’ mouths. But if you manage the financial impact of the coronavirus in a compassionate way, you will come out of this stronger than ever before.

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Readers' comments (2)

  • darren hoggett

    I think retailers and suppliers need to find a happy medium where possible, but the key will be how long the shops are shut. If the shops are closed until August - which is our educated guess if the predicted peak for the virus is June - the AW20 season would normally be in full swing and it will be difficult for shops to accept existing orders - and that assuming they make it that far.

    Brands will have to make much smaller collections for the next few seasons, because the new 'normal' will be much smaller buys because money will be in short supply from the retailer and the consumer.

    The crashing of the economy will have ramifications for years to come, so everyone involved in what will be left of the industry must have modest expectations. The only upside from this crisis is that retail and suppliers will have to be better managed with less and that has been a long time coming.

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  • And how does Drapers judge 'pile em high and sell it cheap' stores that have cancelled order for goods already made and paid for by suppliers ?

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