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Yesterday, kids’ clothing brand Gymboree filed for Chapter 11 bankruptcy. It’s not just one more example of retail’s dire, dismal state, it’s a sign the sector might soon be a career category of the past.
As part of Gymboree’s strategy to get back on track, the company, which opened in 1986 and now has 1,281 locations, plans to close up to 450 stores. While this restructuring isn’t a shock to anyone who’s been studying its finances, it is kind of shocking to hear that 11,000 jobs are at stake.
This hemorrhaging of retail jobs comes on the heels of last week’s mass layoffs at Hudson Bay Company, where employees from Saks Fifth Avenue and Lord & Taylor were among the 2,000 people laid off. The news of HBC layoffs came on the same day that Ascena, the parent company of brands like Ann Taylor, Lane Bryant, and Dress Barn, told investors it will be closing up to 650 stores (although it did not specify which brands will be affected just yet). Only two weeks ago, affordable luxury brand Michael Kors announced it too would close 125 stores to combat brand overexposure and plummeting sales.
With news of thousands of store closures hitting every fiscal quarter, what does this mean for American employment? Frankly, the cuts run deep.
The retail sales associate is one of the most popular jobs in the country, with roughly 4.5 million Americans filling the occupation. In May, the US Bureau of Labor Statistics released data that found that 7.5 million retail jobs might be replaced by technology. The World Economic Forum predicts 30 to 50 percent of retail jobs will be gone once struggling companies like Gymboree fully hop on the digital train. MarketWatch found that over the last year, the department store space bled 29,900 jobs, while general merchandising stores cut 15,700 positions. At this rate, one Florida columnist put it soberingly, “Half of all US retail jobs could vanish. Just as ATMs replaced many bank tellers, automated check-out stations are supplanting retail clerks.”
This doesn’t necessarily mean retail jobs will disappear forever. Retail is like every other industry that’s had to be reinvented (the cries that profitable journalism is failing have been quieted by digital media companies, and now here you are, reading Racked). Retail jobs will likely move online, as Amazon continues to expand and other companies stretch into e-commerce. The difference here, though, is that the transformation of the retail job will have consequences on an already vulnerable population. As the Harvard Business Review wrote earlier today, retail workers “earn poverty-level wages, and have unpredictable schedules, few opportunities for success and growth, and little meaning and dignity in their jobs.” If what was once a cash register job now requires advanced tech skills, the evolution of the retail job could end up completely isolating those who have traditionally filled it.
There’s no denying that e-commerce is the future, that the US is over-stored, and that shoppers would rather resort to digital fast fashion brands than American heritage ones. You could even make the argument that this retail Armageddon will eventually make shopping a better place. But the pileup of stores shuttering will affect millions of people in the near future — people who might not have a shot at recovery.