Layoffs are coming to Britain’s high street—and merchants across the spectrum are feeling the heat.
John Lewis, Harrods, the owner of Topshop, and suiting specialist T.M.Lewin are slashing headcount as the coronavirus pandemic takes a toll on the U.K.’s hard-hit retail sector—where bankruptcies have already rattled a raft of fashion firms.
In a statement, Sir Philip Green’s Arcadia Group described a restructuring of its head offices as “essential to ensure that we operate as efficiently as possible during these very challenging times.” Three months of store closures, it added, have forced the company—whose eight brands include Topshop, Topman, Miss Selfridge, Wallis, Evans, Dorothy Perkins, Burton and Outfit—to trim 500 to 2,500 staff from headquarters.
Luxury emporium Harrods is also expected to shed nearly 700 of its 4,800 staff members, just weeks after announcing a popup outlet offering markdowns on an overflow of spring merchandise. Though Harrods reopened on June 15, select departments, including beauty and dining, remain closed. Employees in those areas are expected to number among staff on the chopping block.
A Harrods spokeswoman did not return a request for comment.
And the department store retailer John Lewis also will be shrinking its payroll, particularly as the company has permanent store closures in the works. Like Harrods, John Lewis has keep certain aspects of its stores—like cafes, fitting rooms and beauty salons—closed despite the rest of the location reopening.
“The reality is that we have too much store space for the way people want to shop now and we have shared this with our Partners. As difficult as it is, it is highly unlikely we will reopen all our John Lewis stores. However no decision has been made and any details would be shared with Partners first by the middle of July, ” a John Lewis spokeswoman said.
Meanwhile, shirtmaker T.M.Lewin is shutting down all 66 shops and laying off most of its 700 employees in a move that will shift all sales online and stave off administration, the equivalent to bankruptcy in the U.S.
“The Torque team has worked to assess all available avenues for the business model going forwards, but having done so, has formed the view that TM Lewin is no longer a viable going concern in its current format,” Torque Brands, a multi-brand consumer goods platform and subsidiary of Stonebridge Private Equity, said in a statement to the BBC.
“The decision to significantly reduce the scale of the business in order to preserve its future will regrettably result in job losses at TM Lewin, as a direct result of the closing of the store network as we right-size the business,” it added.
All nonessential retailers in the U.K. closed their doors on March 23 in an effort to stop the spread of the coronavirus. Retailers are only now beginning to reopen their doors following a few months of lockdown. Social distancing requirements are still in effect at all stores.
Like in the U.S. and elsewhere, even when stores reopen, consumer demand is expected to be down for some time. Many shoppers have migrated over to the online channel, but those sales haven’t yet grown enough to make up for lost sales at brick-and-mortar locations. And more jobs could very well be lost in the months to come as retailers fine-tune operations and could decide they need to shutter more doors than initially planned.