OPERATIONS

Kronos: Retail hiring slows for second consecutive month

BY Staff Writer

Chelmsford, Mass. — The Kronos Retail Labor Index edged down one-tenth to 4.2% in July, reflecting declines in both hires and applications. (The index is defined as the ratio of hires to applications within a given month, expressed as a percentage. A level of 3.0 means that for every 100 applications received, three hires occurred.)

The retailers representing 18,362 distributed locations across the U.S. that make up the Kronos data sample made 29,835 hires (seasonally adjusted) in July 2012, the lowest reading since January 2011 and the second consecutive monthly decline.

In other findings, the number of applications received by retailers included in the Kronos sample fell 7.6% to 715,549 in July 2012 from a level in June that was revised slightly lower, all on a seasonally adjusted basis. Applications have fallen in six of the last seven months. In addition, the level in July was nearly 230,000 below its level one year ago and the second lowest level since the series began in September 2006.

"The Kronos Retail Labor Index edged down one-tenth to 4.2% in July, reflecting declines in both hires and applications. Following a strong start to the year, the recovery in hiring has slowed in recent months. A recent deceleration in overall consumer spending has likely encouraged more caution in hiring at retail,” said Chris Varvares, senior managing director and co-founder, Macroeconomic Advisers, which prepares the analysis and write-up for the monthly Kronos labor report.

Varvares added that until business conditions for retail firms begin strengthening again, which his firm expects later this year, he does not expect to see a marked pick-up in monthly hiring.

“In addition, we believe hiring has been restrained, in part, due to an elevated retention rate at retail firms in the Kronos sample, which indicates less job turnover and therefore reduced need for new hires,” he said.

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News

Things get ugly at Tuesday Morning

BY CSA STAFF

DALLAS — A lawyer representing former Tuesday Morning CEO Kathleen Mason asserts the closeout retailer fire her upon learning she was diagnosed with breast cancer.

Kathleen Mason, the former President and CEO of the Dallas-based, closeout retailer, has filed charges of disability discrimination against her former employer with the Equal Employment Opportunity Commission (EEOC).

In the filing, Mason said she was removed from her leadership role in June after disclosing to the Tuesday Morning board that she was battling breast cancer. Mason led the company to 12 consecutive years of profitability before her firing.

“Current quarterly estimates were down at the company, but this is a woman who had proven to be a more-than-effective leader and prepared the company to weather the current economic downturn,” said attorney Rogge Dunn of Dallas’ Clouse Dunn LLP, who represents Mason.

Dunn notes that Tuesday Morning had been profitable every year Mason led the company, and that the company has no long-term debt. During her tenure, private equity investors led by Madison Dearborn saw an initial investment of approximately $117 million grow in value to more than $700 million, says Mr. Dunn.

“Given her record, this is someone any company would want leading them through these challenging times. But instead, the board’s attitude toward Kathleen changed after it learned of her breast cancer diagnosis and treatment,” he said. “But those who know Kathleen know that she would never allow her health to become a corporate liability.”

The severance package offered to Mason emphasized medical benefits and included a 10-year consultancy clause, after which an 18-month non-compete clause would begin, in effect locking her out of working elsewhere for nearly 12 years.

“The board made it clear she was not being fired ‘for cause’ and the company wanted to retain her expertise for another 11½ years. One has to question why she was removed from her job,” said Dunn.

At the time of her dismissal, Tuesday Morning announced that it "relieved Kathleen Mason of her duties as president and CEO" and did not comment on her performance or the reason for the decision.

"The board of directors concluded it was the right time to transition leadership to a new executive who will guide the company through its next stage" said Bruce Quinnell, the chairman of the board, in a press statement.

Late Friday, Tuesday Morning commented on Mason’s claims, saying that her termination was lawful and made in conformity with the terms of her employment agreement. The company said it believes that any claims relating to her termination are without merit and intends to vigorously defend any such claims.

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FINANCE

Walgreens’ July same-store sales down 7%

BY Staff Writer

Deerfield, Ill. — Walgreen Co. said that its same-store sales fell 7% in July as its split with Express Scripts continued to hurt its top line. (The two companies last month reached an agreement to resume doing business, but that doesn’t start until Sept. 15.)

The company’s pharmacy same-store sales were down 9.7%, while front end sales fell 2.4%. The performance missed analyst expectations.

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