Retail bankruptcies aren’t the only numbers approaching recession-era levels.
With store closures topping 6,000 for the year, the number of announced job cuts in retail has passed 60,000, according to research from outplacement firm Challenger, Gray & Christmas. The year’s retail job losses have already surpassed all other years but one since 2009, and 2017 is barely half over.
Most of the losses have come from the department store and apparel sectors, as well as other niche retailers. Macy’s alone has let go of 10,000 people, and J.C. Penney has laid off another 5,000, according to Challenger.
The losses could continue as more companies fall by the wayside and others take a more cautious approach to their store footprint. Retailers, meanwhile, will have to figure out how to make their remaining stores — and with them their remaining store associates — as productive as possible. That could mean equipping them with technology; giving them more time, power and incentive to boost store sales; or just asking them to do more with less (something many economists will tell you isn’t possible).
And then there’s e-commerce, commonly accused of being the leading cause of the retrenchment in retail. But some research suggests that e-commerce is creating jobs far faster than brick-and-mortar retail is shedding them.
It’s not just bankrupt retailers closing stores and shrinking or freezing their footprints and laying off workers.
“In terms of store network downsizing, I think retailers are being much smarter and more proactive now than they were last year, not only on store closures but also on the upfront side, with how much new store build they’re doing,” Pete Madden, a director with consulting firm AlixPartners, said. “Because of all the Chapter 11s, I think there’s an acknowledgement that no retailer is immune from what’s going on right now. Instead of looking at already-struggling stores, retailers are being proactive about projecting a store’s [profit and loss] out over the next three years and being realistic about: Does that store need to be around?”
“That is a good thing overall for retailers, but it doesn’t help job growth,” he added.
At the same time, the list of companies cutting their corporate staffing is also long, and growing. Among them are Sears —with more than 500 layoffs this year—Dick’s, Walmart, Lowe’s, Hudson Bay, Abercrombie & Fitch, American Apparel and more.
“On the corporate side, some of that is just a reaction to the current business environment,” Madden said. “If your [comparable store sales] are down 5% to 10% year after year, you have to take an action. The question is if that’s deep enough — if online continues to accelerate and comps continue to go down at that rate.”
The various rounds of layoffs and corporate struggles have freed up some talent that better-off retailers might look to attract. “There are good people on the market today, whether they’re at struggling retailers today and are actively looking to leave, or in some cases they were part of a Chapter 11 and now they’re available,” Madden said. “For retailers doing well, it’s a buyer’s market.”
As for the thousands of store employees set adrift amid the much-hyped “retail apocalypse,” it’s difficult to say what will become of them.
Michael Mandel, chief economic strategist for the left-of-center Progressive Policy Institute, said that some workers might end up elsewhere retail. He points out that overall retail job numbers have moved little this year. For example, the Labor Department’s full retail category — a vast catchall that includes, among other categories, gas station and auto parts store workers — fell by less than 7,000 workers between last May and May 2017.
But Mandel goes further, arguing that retail is actually creating jobs right now, if you count e-commerce. He’s been trying to do just that, looking…