OPERATIONS

Ex-employee sues Borders over mass layoffs

BY Staff Writer

New York City — A Friday report by Reuters said that a former Borders Group employee is attempting to represent a class of about 300 Ann Arbor, Mich., workers in suing the bankrupt retailer for not giving proper notice of impending mass layoffs.

Jared Pinsker, who worked at Borders’ Ann Arbor headquarters until he was laid off in July, sued the bookseller in U.S. Bankruptcy Court in Manhattan on Friday, basing his allegations on the federal Worker Adjustment and Retraining Notification Act that requires certain companies to give 60 days’ notice before conducting mass layoffs of at least 33% of a given facility’s workforce.

Pinsker alleged that he and his colleagues received no notice when they were let go between July 23 and August 23. The lawsuit seeks damages equal to 60 days’ unpaid wages, pension contributions, health care and other benefits.

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FINANCE

Retailers forecast strong holiday, show hiring restraint

BY Katherine Boccaccio

Philadelphia — According to a survey released Tuesday by global management consultancy Hay Group, 68% of retailers expect holiday sales to increase this year. However, hiring plans remain conservative, with 67% of retailers hiring at the same level as last year and 25% hiring fewer seasonal workers.

“Retailers have a tempered optimism about the holidays this year. Cost inflation has made profitability more elusive, and retailers are trimming the fat with staffing and store hours,” said Craig Rowley, VP and global practice leader for Hay Group’s retail practice.

The double digit growth in e-commerce sales this year is also influencing hiring levels. Nineteen percent of retailers say they will hire fewer seasonal staffers in stores this year due to the increase in their online sales. This decline may be offset by the 19% that say they will hire more seasonal workers in distribution centers to support the uptick in online orders.

Hay Group’s survey, in its fifth year, analyzed responses from 21 major U.S. retailers including Charlotte Russe, Coldwater Creek, DSW, Macy’s, Michael’s Stores and Pier 1 Imports.

Other report highlights included an uptick in permanent workers, as 19% said they are hiring fewer seasonal and more permanent workers this season. Pay rates for seasonal workers are largely even with 2010, but 19% plan a modest uptick of $.05 – $.30. Still, 48% note that they pay seasonal workers less than permanent workers in the same position, compared with 25% last year.

Discounting may not be as rampant in holiday 2011. An overwhelming majority say they are not planning to offer deeper discounts on Black Friday (89%) or Cyber Monday (94%) this year. The timing for discounting also continues to be spread throughout the season. While 78% say the timing for holiday promotions will remain consistent with 2010, 22% say they will begin earlier this year. A majority (63%) plan to start promotions in November, but some early birds plan to begin in October (13%), September (6%) and even August (6%).

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REAL ESTATE

Survey: Retailers plan to open more stores due to lower rents

BY Katherine Boccaccio

Los Angeles — A report released Tuesday by commercial real estate firm C.B. Richard Ellis said that 59% of U.S. retailers plan to open more stores due to the attractive rental rates available in the current market environment.

According to CBRE’s second annual “Shop Talk – A Retailer’s Perspective” survey, luxury, wholesale clubs and discounters are slated to be the biggest expanders. “Our survey shows a significant number of retailers will be taking advantage of an opportune time for growth due to compelling rent levels — luxury goods, wholesale clubs and discounters in particular are expected to continue to expand,” said Anthony Buono, executive managing director of CBRE Retail Services in the Americas.

The report also found that 93% of the retailers surveyed are using social networks, such as Twitter and Facebook, to assist with the branding and marketing of their products, up from 70% a year ago.

The consensus outlook among retailers has turned more cautious with regard to the current economic environment. Only 27% of retailers in 2011 viewed the economy as improving as compared to 35% last year. However, 45% of retailers view the economy as stable compared with 35% last year, with 27% of retailers feel that the recovery has already occurred within their market segment.

Among the other findings, 94% of retailers have been able to negotiate tenant improvements in their leases, including landlord financial contributions toward building out their space, the term of the lease and the rights to terminate early.

Some of the risks that retailers cited as possibly impacting their businesses included unemployment (80%), the state of consumer confidence (79%) and higher food and energy prices (68%).

For the survey, the CBRE Retail Services team surveyed major retailers in June and July 2011 about their expansion plans, the lessons learned from the recent recession, what concerns they still have and what they foresee for the future.

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