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Many companies started to lay off employees or stop production as COVID-19 pandemic affects sales

2020/04/29


Chanel halts production

 

Chanel has joined the ranks of competitor Gucci in halting production in the short-term amidst the global coronavirus pandemic. The company is closing factories in France, Switzerland, and Italy for the next two weeks.

 

Gucci has already shut factories in its Tuscany and Marche regions through March 20, but that is likely to be extended as Italy is still on lockdown. Hermès will also be shutting down all 42 of its factories temporarily.

 

“Chanel took the decision, in accordance with the latest government instructions, to close the entirety of its production sites in France, Italy and Switzerland [watchmaking] as well as its haute couture, ready-to-wear, métiers d’art and jewelry,” the company said in a statement.

 

Chanel has also cancelled its cruise show that was due to take place in Capri in May. Cruise collection seasons appears to be cancelled all together at this point with Gucci, Versace, Max Mara, and Hermès also cancelling their cruise/resort shows.

 

Everlane lays off 42 workers

 

Everlane has laid off a high number of workers as retailers across the fashion industry cope with a harsh economic state. Though it is not clear how many workers have been let go, WWD reports that "several hundred" workers were affected.

 

A twitter account called Everlane Union has been chronicling the events. On March 27, the account posted: "Nearly every member of our team was just laid off. Retail workers from Everlane stores are being trained to replace us to answer your support emails. We are devastated beyond measure."

 

The company laid off 42 remote part-time customer experience team members without notice on March 27, as was reported on a Go Fund Me page set up by Everlane Union. The company also dismissed eight temporary workers with three-days notice on March 17.

 

Everlane Union formed in December 2019 to support the brand's customer experience team. It is not formally recognized by company leadership.

 

Like many other fashion retailers, the ethically-conscious brand has been working to ensure its business continues to succeed through the COVID-19 crisis. After temporarily closing its retail stores on March 14, Everlane began running frequent sales on its e-commerce site - despite having previously had a policy of no sales.

 

According to the dismissed workers, the lay-offs might not be a result of COVID-19's impact on Everlane revenue.

 

"Just a few days prior to the abrupt dismissal of my fellow workers, our team had asked Everlane for voluntary recognition of our union. While we did not receive a response at the time, Everlane did respond—by laying off a majority of our team and issuing full-time work for the remaining 16 members," the Go Fund Me post reads.

 

Just a week before the 42 customer experience workers were let go, Everlane announced to consumers that it would donate 100 percent of its profits from the 100 percent Human collection to Feed America's COVID-19 Response Fund. In retrospect, this move can be seen as controversial as the company is donating money elsewhere while leaving its former workers jobless during this global crisis.


H&M cuts working hours

 

Even the world's second largest retail company wasn't immune from the effects of coronavirus. H&M has announced that in the wake of a 49 percent sales fall, they are now in talks with thousands of staff members regarding shortening work hours and. The news was reported by Reuters.

 

"The spread of Covid-19 has caused an exceptional situation and the H&M group is forced to make several difficult decisions," H&M said in a statement to Reuters. "Dialogue with employees on temporarily shortened working hours affecting tens of thousands of employees globally has been initiated in several markets. It also concerns officials at central functions."

 

Bloomberg has also reported that H&M is pausing buying now due to uncertainty of when their stores might reopen. "We will slowly start to buy again once we know more about how the situation will evolve," chief financial officer Adam Karlsson said in an interview on "Bloomberg Surveillance."

 

For the first time since they listed on the stock exchange in 1974, H&M is also scrapping its quarterly dividend. The only bright spot for H&M is that their sales last year appear to have grown, with Q4 sales growing 8 percent.

 

For more information, please pay attention to International Fashion Fair.

 

Source: fashionunited

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