Surf-style fashion brand White Stuff is facing “major” layoffs to prepare the company for reduced demand and reduced business hours following the coronavirus epidemic, Sky News learned.
The retailer, which employs more than 1,500 people in 120 stores, told sales and head office staff on Wednesday that it would begin a consultation on the potential job cuts on Wednesday.
White Stuff declined to say how many jobs would be lost, but said the cuts would be significant and were a direct result of the COVID-19[female[feminine pandemic.
The company believes the epidemic will have a fundamental impact on business conditions when the lockout restrictions are relaxed, and says it is now taking action to cut jobs to try to make sure all of its stores remain open.
Insiders said it was clear that restrictions on social displacement would remain in place for the foreseeable future.
As a result, stores are likely to be open for shorter hours, have fewer customers, and require fewer staff to keep them open.
The company believes the epidemic has accelerated existing trends in retail, from brick and mortar stores to online shopping, and says it hopes to reopen all of its stores when the lock comes up.
CEO Jo Jenkins said, “In the past eighteen months, we have set out to transform our business into a more digital brand.
“What we intended to do to reshape the business now needs to be done faster.
“We have to face reality, especially given the lingering uncertainty about when and how stores might open due to social isolation, that we need a more operating model light and more agile which allows us to react to changing customer behavior. “
White Stuff’s position is informed by its operating experience in Germany, where its stores have reopened after the government of Angela Merkel began to relax the restrictions.
Its action comes at a time when concerns are growing about the sustainability of the government’s employee support program, in which more than six million people have been put on leave with up to 80% of their salary paid by the state at a cost of around £ 8 billion to date.
The program is due to expire in June and the Treasury is considering how to phase it out, with business groups worried that millions of people will remain unemployed if support is withdrawn before restrictions are relaxed and confidence consumers never come back.
Government sources suggested this week that businesses and staff are becoming “dependent” on the leave scheme, although he only paid one month’s wages for businesses ordered to close by the state.
Asked about the Prime Minister’s questions about the end of the program, Boris Johnson told Parliament that he wanted workers to “earn their pay” when they can get home safely.
White Stuff, who placed staff on the leave plan, said the plan’s current end date, June 30, meant it was not viable as an alternative to the layoffs.
The company is among the first to directly link staff cuts to the impact of the epidemic on future trade.
It is feared that many other retailers will be faced with similar decisions in the weeks and months to come.
Some have predicted that the leave plan could become a “waiting room” for layoffs if the economy does not rebound enough.
Paul Johnson, director of the Institute for Fiscal Studies, warned: “‘ If you delete it quickly, you risk a wave of unnecessary redundancy.
“If you are too generous, you risk a longer and deeper recession and a bigger blow to public finances. “
The Prime Minister will explain on Sunday how the current restrictions will be relaxed over time, with a gradual return of stores currently considered non-essential and likely to appear in the medium term.
White Stuff, which was founded in the 1980s by university friends George Treves and Sean Thomas, posted a loss of £ 1.3 million on sales of £ 142 million last year and employs more than 1,900 people in total, including 1,500 in stores.