Shoppers Stop, the oldest department store chain, has decided to lays off more than 1100 employees and closing some stores. This may be due to declining sales and bleak demand outlook for discretionary products in the wake of Covid-19 pandemic and lockdown.
Nearly 15% of the 7500 staff and mid-level workers have been asked to resign by June 15. These include 160 people in the back-end operations and over 1000 front end store level employees.
The company confirmed layoff plans. But they said it will re-hire from the same set of people once situation begins to improve.
Like other retailers, we will be looking at closing lower performing and unsustainable stores, a spokesperson said. With the declining business, layoffs are unfortunately inevitable. With a limitation on adding new stores in this situation, the size of our business is effectively reduced. And therefore, unfortunately we need to adjust our cost base in such times. At this stage It is also presumed that due to online shopping there will be lower footfall to stores in coming few months.
It was noted that employee costs is about Rs 315 crore, or equivalent to 15% of their annual sales.
With the government relaxing the lockdown and allowing malls to operate, Shoppers Stop has reopened approx 60% of its 90 department stores after a gap of more than two months.
More than two years ago, Amazon had acquired a 5% stake in Shoppers Stop and to comply with changed regulatory requirements, the department store chain set up a subsidiary for its online portal to directly sell at the e commerce giant’s portal.
Globally, retailers have already laid off over 2.5 lakh employees since March. In India, many retailers have made steep cuts in pay with top management even forgoing salaries completely.
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