- The combined forces of coronavirus pandemic and expanding online retailing has taken its toll on the traditional retailing
- There are various companies who have been laying off staffs due to deteriorating business conditions
- There were many companies who were not so lucky to survive the financial strain and fell into administration
The retail industry in the United Kingdom is going through a transition phase. The coronavirus induced lockdown has only hastened a process that would have made itself evident in a couple of more years’ time. Online retailing has been eating into the market of traditional retailing for many years now, and voices were being raised against it, but in the time of the pandemic when most of the people in the country were locked up in their homes, online retailing played a pivotal role in keeping the country provisioned. This was the only sub-sector which was witnessing a growth in business activity levels while almost all others were sinking deep in losses. The traditional retailing sector, on the other hand, was almost shut, as most of the outlets were closed down following government orders. Though many of these companies were able to furlough most of their staff, and also received financial support, many had to lay off a substantial amount of their staff, and some even went into bankruptcy.
Below are five retail companies who are laying off staff due to deteriorating business conditions
- Mulberry Group PLC– Top luxury brand Mulberry announced last month that it would reduce at least 25 per cent of its workforce globally, which works out to about 1,500 staff members. The company which has nearly 120 stores across 25 countries had seen many of them getting closed due to the lockdown imposed in many of the countries. Though the company has been witnessing a phased opening of its stores since 15 June, it is still initiating a consultation process with its employees to figure out how many jobs it can protect, while also safeguarding the financial health of the company.
- Harrods – British Luxury department store Harrods announced that it would have to shed about 14 per cent of its workforce in order to protect the financial condition of the business. The 672 people who will be losing their jobs will be from those parts of the business that have been worst hit by the pandemic. It is worth mentioning here that the company’s flagship store in central London has been closed for three months now, causing significant losses to the company.
- Monsoon Accessorize – Fashion Brand Monsoon Accessorize would be cutting about 545 jobs immediately as the owner and the founder of the company Peter Simon led the company out of administration and is making efforts to protect at least 100 stores of its current strength of 230 stores. The owners are currently in talks with landlords of its stores to see if any of them could be opened as the lockdown ends on the 4
- Mountain Warehouse - Mountain Warehouse, the retailer of outdoor clothing and equipment, has announced the laying off of nearly 2,000 jobs in the month of March on account of the lockdown. The company owns 400 stores across nine countries, most of which were shut on account of government orders.
- Arcadia – The owners of fashion shop owners Topshop has also announced job cuts of nearly 500 staff from its head office in order to restructure itself, in the wake of the unprecedented global crisis. The company has been staring at a massive financial crunch, as most of the stores of the company’s three brands; Topshop, Miss Selfridge and Dorothy Perkins remained closed since 20 March.
All were not lucky enough, and many of the retailers fell victim to the pandemic, below are five retail companies who have fallen into administration due to the pandemic.
- Cath Kidston – Cath Kidston the British retro fashion store has announced that it will not be opening its stores and has filed for administration. The company employs around 22,000 people and has gone into administration twice previously as well. The owners though have been able to secure a deal, where they have bought out the company's brand name and its online business, but the physical stores will close.
- Debenhams – Debenhams fell into administration on 9 April 2020, exactly one year after, it had filed for administration the first time. The company owns 178 stores in the United Kingdom and Denmark and franchise stores in other countries as well. The company's product range included clothing, accessories, household items and furniture.
- M Lewin – T. M Lewin the online sellers of shirts and ties, which also owned 65 stores in the United Kingdom went into administration on 30 June when it failed to find a buyer. The company’s assets have been taken over by SCP private equity, who intend to make the company totally online. Nearly six hundred employees of the company have lost their jobs in the process. Most of the company's stores had remained closed during the seven-week lockdown.
- Lee Longlands - Furniture Stores retailer Lee Longlands went into administration in the latter part of June in order to restructure itself. The company has six stores in the West Midlands. The company has suffered massive revenue losses because of the coronavirus pandemic induced lockdown.
- Oasis and warehouse - British high street fashion brand Oasis and warehouse also fell into administration in April because of the lockdown. While the decision led to the loss of 200 jobs immediately, the company managed to furlough 1,800 of its staff members with 80 per cent salaries. The company has been forced to close its 92 stores and 437 concessions in the United Kingdom because of the lockdown.
There are several other retail businesses in the United Kingdom who are in financial trouble because of the pandemic crisis with thousands of jobs at risk. The unlocking of the economy, though has brought about some cheer in the industry. The retailers who are able to survive this crisis will be able to ramp up their market share because a significant jump in business activity levels has been seen in the industry in the months of May and June.