The COVID-19 crisis has not only done a number on overall retail sales, it has impacted those who sell, make and distribute the goods the most—and footwear is certainly no exception. More than 100,000 employees within the footwear industry have either been laid off or furloughed amid the COVID-19 pandemic as of May, according to the Footwear Distributors & Retailers of America (FDRA), signaling that retailers, industry associations and governments alike are going to have to find a way to give the sector a shot in the arm.
Gary Raines, chief economist at the FDRA, noted that the job losses and furloughs were particularly acute on the store floor due to the mass store closures across the industry. But on the whole, the pandemic affected jobs across the footwear supply chain, whether it meant distributors, manufacturers, sourcing agents and designers alike. In a May survey, the FDRA reported that footwear executives anticipate it could take six months or more for businesses to get back to normal supply chain operations.
He noted that the brands and retailers that get back on their feet and bring jobs back to the industry will be those that are most able—and willing—to improvise, adapt and overcome the rapid shifts in spending.
“Several retailers transitioned stores to small-scale ship-from-store fulfillment centers as online sales surged and brick-and-mortar collapsed,” Raines said. “Others embraced curbside delivery and adopted new COVID-compliant measures in their stores like social distancing, sneeze guards at checkout, etc. Certainly not business as usual, but that mindset will help the nimble recover first.”
With so many job losses across the board, the financial burden is heavy for all individuals affected. The Two Ten Footwear Foundation, a non-profit organization that offers emergency financial assistance to footwear employees and their families in crisis situations, has seen a 10X increase in financial assistance applications in the three months since the pandemic.
“On an average month, we’ll receive 230 applications,” said Shawn Osborne, CEO of the Two Ten Footwear Foundation. “We’ve now had a month where we received about 2,400 apps in a single month.”
The demographics that applied for aid may give a deeper look into the overall state of the industry and who was impacted the hardest: 72 percent of applicants were female, 77 percent were under the age of 32 and 68 percent were people of color. As many as 63 percent were single parents, and 66 percent were in retail jobs. Only 21 percent of applicants came from warehouse and distribution jobs.
“That wasn’t as bad because their e-commerce business was still going,” Osborne said. “They kept some of the warehouse and distribution where they almost entirely shut down retail. It’s slowly coming back, but with the protests and everything else, we’ve gotten phone calls from people a second time saying that they went back to work but got furloughed again.”
The 66 percent in retail jobs reflects the reality that the store employee is likely to be the hardest hit in the long run as some stores may never reopen, particularly department stores and specialty footwear stores. Raines pointed out that a Wells Fargo note the FDRA referenced in a recent “Week In Review” email said approximately 10 percent of retail demand may be lost even after recovery.
But the massive increase in e-commerce sales throughout the pandemic indicates that if any job losses are going to be refilled in the retail ecosystem, they will have a stronger digital focus.
“With this triple-digit surge in e-commerce sales in 2020, we’re going to see e-commerce jump to an unparalleled share in total footwear demand in the U.S.,” Raines said. “There’s a widely held sentiment that that share will not decline. There’s a lot of potential on the online and the fulfillment side, for brick-and-mortar jobs to migrate in that direction. It’s not necessarily that everyone will work in a fulfillment center, but more store employees may be fulfilling online orders on a city-by-city basis.”
Raines noted that he is still wary of “dark clouds in the horizon” for the third quarter if a second wave of the virus kicks in, but said that overall, footwear is in a much better position than it was two months ago.
Alana Yavers, senior vice president of recruiting at creative staffing firm 24 Seven, said she could see more companies hiring temporary employees, especially in the face of uncertainty of a second wave if stores start closing again.
“It’s a good way to get what you need done, but also without the responsibility to lay employees off again in a very short period of time,” Yavers said. “I know that a lot of companies were really wary about posting information [about full-time jobs] online so soon, and questioned whether posts should be taken down.”
Prior to the economic fallout from COVID-19, the U.S. job market was robust, with the overall national unemployment rate hitting as low as 3.5 percent in February. That same month, average hourly earnings for shoe store workers reached a record $19.45, according to the FDRA. So at the very least, jobs within the industry were at a healthy state before the pandemic set in.
What makes the current footwear jobs environment so unprecedented, even compared to harsh economic periods like the Great Recession, is that the industry is dealing with multiple headwinds at a time. While the job losses that mounted due to sudden demand-side problems and retail store closures were worse than 2009, the issues have only been exacerbated due to supply-side troubles from the Trump administration’s tariffs on Chinese goods.
“We have seen an unprecedented decrease in demand, as well as the steepest decline in year-over-year footwear imports since 2001,” Raines said. “The decline in footwear imports overshadows the relatively modest declines in the Great Recession. It’s really a one-two punch. One punch is bad enough, but when you get that second punch on top of it, you kick an industry while it’s down.”
Yavers said that 24 Seven’s outreach from prospective footwear and apparel employees has more than doubled since the pandemic, indicating that job demands remain high even as companies try to develop a sense of normalcy. For those that have been laid off within the footwear industry, prospective employees have resources at their disposal to gain exposure to a wider base of retailers.
For example, while Two Ten provides financial assistance to those in need, it also provides educational resources, mentoring and scholarships. This year the foundation has already given $800,000 in scholarships to approximately 190 total recipients, which include current and former footwear industry employees and their children. The Two Ten Connect program enables footwear community members to connect with fellow industry individuals and access other services and programs.
“It is critical for the footwear community going ahead that we develop more awareness around programs like this and work more closely with HR teams to prepare for future crises,” Osborne said.
FDRA also launched during the pandemic a Digital Professional Development Center, which includes career listings for job seekers as well as insights and training via videos, podcasts, articles, documents and memos to help employed and unemployed individuals maintain their skills and stay current on major issues.