Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Fashion retail’s redundancy crisis at Christmas

Shutterstock 533910574

The festive season looks bleak for thousands of retail workers facing redundancy, many of whom are turning to charity for help.

There is no denying the unfortunate fact that 2019 has been yet another difficult year for UK retail.

Weak consumer demand, rising costs and the switch to online shopping, exacerbated by Brexit uncertainty, have put many businesses under increasing pressure. As a result, several collapsed into administration or launched company voluntary arrangements (CVAs), which saw thousands of store closures and job losses.

A net total of 85,000 head office and in-store retail jobs were axed between the third quarter of 2018 and the third quarter of 2019, the British Retail Consortium (BRC) reported. In the first half of this year LK Bennett, Pretty Green and Debenhams went into administration, resulting in more than 1,000 job losses.

The situation is dire for those having recently been made redundant, particularly just before Christmas when outgoings increase

Womenswear high street retail CEO

Jack Wills collapsed into administration in August, before it was bought by Sports Direct. Several head office and in-store roles have been cut since, Drapers understands, and more than 1,000 jobs are still at risk. Meanwhile, Karen Millen and Coast went into administration in the same month, and 1,100 lost their jobs.

The retailer cull looks set to continue into 2020 as Mothercare prepares to close all its UK stores by February, resulting in 2,500 redundancies and further job cuts are on the horizon at retailers including Bonmarché, White Stuff, Asos, and Mamas & Papas as they undergo head office transformations and store-closure programmes.

The wave of redundancies is having a devastating effect on employees in the industry.

“With many retailers collapsing, many people have been made redundant, which is very raw for those families involved,” says Anna Pangbourne, director of Fashion and Textile Children’s Trust (FTCT), a charity that provides financial support to families in the UK fashion and textile industry that are experiencing hardship. “If administrations come out of the blue, people can often struggle to find money elsewhere.

With many retailers collapsing, many people have been made redundant, which is very raw for those families involved

Anna Pangbourne, director of Fashion and Textile Children Trust 

“It is currently a period of huge emotional stress and anxiety in the build-up to Christmas – which is a particularly expensive time of year. Many parents are worried about providing for their family – and whether they will be able to provide school uniform, presents and essentials for their children. We deal with the initial shock for those families, and try and be as quick and proactive as we can.”

FTCT is working with retailers including Marks & Spencer

FTCT is working with retailers including Marks & Spencer

The FTCT offers redundancy grants to parents and children who are struggling financially. The company is currently working with companies including White Stuff, Mamas & Papas, Mothercare, Karen Millen and Coast.

The CEO of one womenswear high street retailer observes: “The situation is dire for those having recently been made redundant, particularly just before Christmas when outgoings increase. It must be very frightening.”

Erica Vilkauls, former CEO of LK Bennett, agrees: “Redundancy is brutal. Those who have experienced administrators coming in and deciding who goes and who stays will feel the effect of that for quite some time. These things seem, to the employees, to happen quickly and largely without warning which adds to the stress.

Redundancy is brutal/ Those who are dismissed within the initial 14-day period lose their preferential creditor status

Erica Vilkauls, former CEO of LK Bennett

“Those who are dismissed within the initial 14-day period lose their preferential creditor status and are considered ordinary creditors. This means that if the administration fails and the company ends up in liquidation anyway, you will stand less chance of receiving your full wages. It is further stress for those with mortgages and bills – which most have.”

Several headhunters tell Drapers they are receiving an influx of CVs, but no jobs for which candidates can apply.

“Currently there are fewer jobs in total and more candidates seeking new roles,” says Karen Collier, managing director of Collier Careers. “This is reflected in the numbers of CVs received.”

Shelley Pinto, managing director of TRP Recruitment, agrees: “We’ve had an influx of CVs recently, but there just aren’t enough jobs for candidates. Some have been out of work since April and are now extremely worried in the run-up to Christmas.”

She adds: “Some people that were in high-up roles are now packing boxes in [a large online retailer] to pay their mortgages, while others have just left the industry altogether.”

More pain to come

Worryingly, the situation shows no signs of easing up and industry experts predict there will be further fallouts after Christmas.

Mark Ashton, CEO and founder of the Little Mistress Group, says: “I think we will see a lot more redundancies in February. Retailers want to collect the cash over this golden quarter and hope that the numbers add up in the first quarter of 2020. I have a feeling that some of the weaker ones will not make it.”

One department store buyer agrees: “Brexit uncertainty and no movement on taxing the big online players means more and more retailers will make redundancies in 2020.”

We’ve had an influx of CVs recently, but there just aren’t enough jobs for candidates

Shelley Pinto, managing director of TRP Recruitment

Sources agreed that in the long-term people will may be put off from entering into the retail industry altogether.

“The decline in UK retailing has had a damaging effect on the sector’s ability to recruit and retain staff,” says the managing director of one footwear multiple. “Many good managers are leaving for other sectors.” 

Another headhunter says: “Retail definitely isn’t the exciting and buoyant industry it once was, and that’s bound to have an impact on people wanting to work in the sector.

While fashion retail is helping homeless people over the festive season, more and more retail workers are becoming dependent on charity

While fashion retail is helping homeless people over the festive season, more and more retail workers are becoming dependent on charity

“Executives are trying to cut costs wherever they can, but it will prove to be a false economy because once trade lifts again, those roles will be very much required and retailers will then have the additional expense of re-recruiting (agency fees, and the time and cost of training).”

Government aid

Industry experts believe that retailers and the government need to work together to prevent the situation getting worse.

Another former womenswear multiple CEO says: “Few retailers offer any cross-discipline training, which could ease the number of redundancies (to a degree). It’s clear retailers making store redundancies are hiring digitally trained staff.”

Investing in training and using technology to help staff is vital

Footwear managing director

The footwear managing director agrees: “Retail is going through an evolution. You have to leverage your staff to help you navigate the changes in the market. They will help you, but you need them to feel loved and respected. Investing in training and using technology to help staff is vital.”

He adds: “If a business is in trouble, you need to be honest with your staff. If you need to downsize, be bold and do it in one meaningful sweep. Do not let the ‘death by a thousand cuts’ happen. It is not a good idea to make a few redundancies and then a few more. Not being decisive in difficult times will just make it harder to sort things out.”

Government could help by way of reducing business rates and rents and introducing an online tax, could enable employees to get back on the retail ladder, sources says.

“As we know, the whole retail platform is forever changing and suffice to say that it will take something special by landlords and the government to change”, Ashton concludes. “It’s officially out of the retailers’ hands right now.”

If you have been impacted or are facing redundancy, go to ftct.org.uk or call 0300 123 9002 for help.

 

Savile Row x Crisis pop-up

Savile Row x Crisis pop-up

Fashion retail’s charitable Christmas

Fashion and Textile Children’s Trust is Drapers’ charity partner at the Drapers Awards. Here are some of fashion’s other seasonal charitable initiatives:

1. Savile Row x Crisis

Savile Row will welcome a menswear pop-up store in aid of homeless charity Crisis between 9-19 of December. It will feature 40 menswear brands from Savile Row legends to leading luxury menswear designers. There will also be a number of events taking place throughout December dedicated to supporting Crisis, including Dermot O’Leary and Tom Stubbs “Shopping Extravaganza Evening”.

2. Peacocks x Make-A-Wish

As part of value retailer Peacocks’ new partnership with children’s charity Make-A-Wish, it aims to raise £250,000 to “make as many wishes for children with critical illnesses come true”. Its efforts will range from employee fundraising projects to selling branded Make-A-Wish products (modelled by reality TV personality Scarlett Moffatt), to donating 15% of sales from selected Christmas lines to the charity.

3. Ted Baker x Wrap Up London

Ted Baker has become the first official fashion brand to team up with Wrap Up London – the campaign that delivers unwanted coats to people in need across the UK. As part of its support, Ted Baker created “drop shops” across its UK branches last week, accepting customers’ unwanted coats and delivering them to each store’s local Wrap Up collection point. Customers received a 15% off voucher in return for their donation.

4. Boden x NHS

Boden surprised a group of doctors, nurses and hospital staff with a festive makeover for its Christmas campaign this year. The British fashion brand raised a glass to their “real stars of Christmas”, who often miss out on festive celebrations and spend Christmas day working. In Boden’s Christmas advert, its personal stylists give healthcare workers a party makeover, before celebrating in style.

5. Matalan x Alder Hey

This year Matalan has teamed up with Alder Hey children’s charity, to launch a collaboration in the run-up to Christmas. This year’s campaign is all about togetherness, and features patients, nurses and parents, as well as staff at Matalan. The collaboration includes pyjamas, socks and pet outfits. 

 

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.