- Shoppers Stop, the country’s oldest department store chain, is laying off more than 1,100 employees and closing some stores in the wake of the Covid-19 pandemic
Shoppers Stop, the country’s oldest department store chain, is laying off more than 1,100 employees and closing some stores in the wake of the Covid-19 pandemic and national lockdown due to falling sales and bleak demand outlook for discretionary products.
Nearly 15 percent of the 7,500 staff, mostly junior and mid-level workers were asked to resign by June 15. These include 160 workers in back-end operations and more than 1,000 staff at the front end store level.
The organization has announced plans for layoffs but has said it will re-hire from the same group of employees once the situation starts improving.
“We will look to shut down lower-performing and unsustainable stores like other retailers,” said a spokesperson for Shoppers Stop. “Sadly, with the down turning market, layoffs are inevitable. In this case, with a constraint on opening new stores, the size of our company is essentially limited and thus, sadly, we need to change our cost base at these times. “The affected workers will earn an immediate paycheck of two months.
The retailer K Raheja Corp, which opened its first door in 1991, said the retail industry witnessed attrition rates in stores ranging from 36-50 percent. It predicts that a substantial part of the migrant workers will not be able to return until the pandemic situation improves dramatically, operating with them on a contractual or temporary basis.
Employee costs of the business are around Rs 315 crore or 15 percent of its annual revenue.
Shoppers Stop has reopened 55 of its 90 department stores after a period of more than two months, with the government lifting the lockout and enabling malls to operate.
However, most brick and mortar retailers expect sales to be driven by online shopping as they re-evaluate their business models in the wake of lower store footfall expectations for the coming months.
“In these unprecedented and difficult times the retail industry has been going through its worst era,” said the spokesperson for Shoppers Stop. “We have been constantly researching different combinations of cost reduction steps to ensure that due to these unexpected situations the least number of employees are affected, and also bear in mind that continuity of operation is maintained.”
Less than two years earlier, Amazon had purchased a 5 percent interest in Shoppers Stop, and the department store chain set up a subsidiary for its online marketplace to sell directly on the e-commerce giant platform to comply with evolving regulatory requirements.
Overall, retailers including Gap, Best Buy, Macy’s, and Kohl have since March laid off more than 2.5 lakh employees.
Many retailers in India, including Future Community and Shoppers Stop, have made steep pay cuts with top management also losing salaries altogether.
The retail sector took a huge hit due to the national lockdown with very few people going out to shop in brick and mortar stores, which has affected the business of retail chains across India. Once everything opens. businesses will take some time to recover and we are hopeful for that.