As Lord & Taylor announced it would lay off 100 to 150 people, and Mervyns and Shoe Pavilion began liquidating their stores, industry experts said the situation will worsen in the coming months.
Since last December, the struggling department store sector alone has shed 60,300 jobs (out of the 276,000 total retail jobs lost), according to the Labor Department, with 10,800 cuts in September. For the first time in two decades, the number of people employed at specialty stores last month was higher than at department stores.
“I hate to say it, but unfortunately this might be the tip of the iceberg,” said Kirk Palmer of Kirk Palmer & Associates, an executive search firm specializing in retail and related wholesale apparel industries. “There’s likely to be a significant number of companies that probably go into Chapter 11 or shut their doors during the first quarter of 2009.”
And as organizations slash spending, employees at many companies could find themselves in a vulnerable position, Palmer said.
“Businesses like NRDC [Lord & Taylor’s parent company] will be looking for opportunities to further streamline their operations,” said Palmer. “That will probably continue through the fourth quarter of 2008 and first quarter of 2009. We expect to see a fair number of people out in the market [looking for jobs].”
Elaine Hughes of executive search firm E.A. Hughes & Co. offered a slightly more positive outlook for footwear professionals, who she believes are in a better position than those working in the apparel industry.
“The apparel wholesalers will cut [jobs] first, as shoes and accessories — although challenged — are still stronger in these times,” said Hughes.
Jeff Foss, SVP of programs and development at Two Ten Footwear Foundation, said the organization has had an increase in requests for financial need this year, but the asks have been largely related to the hurricane season, not as a result of unemployment. However, the organization is preparing to give monetary assistance due to job losses, said Foss.
Hughes said the positions that are most vulnerable in these times are “non-bottom line jobs,” such as marketing or publicity coordinators and strategic planners.
That was the case for Rita Kassak, a public relations professional whose position at Torrance, Calif.-based Podium Distribution, which owns DVS Shoe Co. and other skate brands, was recently eliminated because of the economic downturn. Her responsibilities, she said, are being spread among other remaining employees.
“Podium has a lot of employees who are all really good at their jobs, so they’re trying to minimize the layoffs. There was only one other person aside from me that has been let go,” said Kassak.
But across the industry, Kassak said she’s hearing about more job losses. “Almost every other day, I’m hearing of friends losing their jobs,” said Kassak, citing one friend who was recently laid off at a small accessory company in Torrance.
Being back on the job hunt, said Kassak, is discouraging and proving to be highly competitive.
Danny Silvera, marketing director for the BC Footwear and Seychelles brands, agreed, though Silvera is on the other side of the hiring process.
“We’re getting tons of resumes,” he said. “I’ve seen more than ever before since I’ve been in this industry.”
At the moment, he said, Seychelles and BC are not actively looking to hire, but they have not yet let go of any employees either.
For some independent retailers, the economic downturn is already causing havoc. Twenty Two Shoes recently announced it was closing all three of its locations in California and laying off 12 employees as the business folded. Co-owner Chris Silverman plans to remain in touch with all his employees, as he hopes to reopen the business within the next few years.