The owner of Brown Thomas and Arnotts plans to cut almost 15 per cent of jobs across the two stores due to trading difficulties arising from the coronavirus pandemic.
Staff at the department stores, which are both controlled by the Selfridges Group, were informed on Thursday of the decision to make 150 employees redundant. Together, the two outlets employ 1,050 people, not including concessions.
The company is to immediately begin a consultative process with staff and said it hoped to achieve as many redundancies on a voluntary basis as possible. It also expressed openness to considering applications from employees for career breaks, shorter working hours and early retirement.
The consultative process is expected to be completed by mid-October.
Donald McDonald, managing director of Brown Thomas Arnotts, described having to break the news to staff as the “toughest decision” he has had to make during his time with the group. He added, however, that the move was necessary to ensure the survival of the business.
“The retail industry is being severely impacted by unprecedented circumstances related to Covid-19 and Brown Thomas Arnotts is no exception. Like many others, we are feeling the effects with sales expected to be significantly down, making 2020 the toughest year we have experienced in recent times,” he said.
“And as we face continued uncertainty, with retail unlikely to return to normal for the foreseeable future, it is clear that we need to take a series of steps to ensure our cost base is sustainable, consistent with the level of business we realistically expect, and to ensure our resources are aligned with the current and anticipated requirements of the business,” Mr McDonald added.
Wider sector
The news is a major blow for the Irish retail sector, which has struggled to bounce back after shuttering operations during the lockdown. While stores have reopened across the State in recent months, lower footfall, a switch to online shopping and a decline in consumer confidence have led to lower sales.
It is also another blow for the Weston-family owned Selfridges Group, which last month announced plans to cut 450 jobs in Britain due to lower sales linked to the pandemic.
While Brown Thomas Arnotts has benefited from increased online sales during the pandemic, these have not been enough to offset the decline in turnover from its physical stores.
“Over the past few weeks we have given careful consideration to a recovery plan, examining every aspect of our business, from costs, to ways of working and organisational structure, and we have also looked at ways of strengthening those parts of our business that have become even more critical during this time, such as digital,” said Mr McDonald.
“We have devised a plan to not only protect our business but position us to navigate the significant challenges that lie ahead; we have prepared for a whole range of possible and even unpredictable outcomes,” he added.
Sales drop
Retail sales in the Republic fell 13 per cent in March as the lockdown came into force and stores closed. The decline would have been considerably worse only for panic-buying that led to a spike in supermarket sales at that time.
While sales have recovered in the intervening months as consumers have moved to spend cash that had been saved during the lockdown period, analysts have warned that over the long term the picture is bleak.
