Blog: Job losses signal change in the US
Joe Ayling | 2 February 2009
Last week was a sombre one for US fashion chains, as mentions of 'cutbacks', 'redundancies' and 'eliminations' plagued the headlines.
Around 2,000 fashion sector jobs were lost as tighter credit lines and lower consumer spending forced sellers of clothing and footwear to reassess their operations.
Industry employment levels were blitzed as 200 jobs were cut at Quiksilver, followed by 41 job losses at The Wet Seal, 107 at Delta Apparel, 57 at Pacific Sunwear of California, 1,000 at Target, 193 at Eddie Bauer, 180 at Chico's FAS and 1,150 at The Bon-Ton Stores.
The news follows cutbacks at Phillips-Van Heusen, Reebok, Brown Shoe, The Children's Place, Burberry, Tandy Brands, Saks, Neiman Marcus, Kenneth Cole, New York & Co, Wolverine, Stein Mart and Marks & Spencer earlier this month.
just-style also reported last week that Spain's textiles industry is looking for a new State credit line, after being left reeling by 12,000 job losses in the first three-quarters of last year.
There was some cause for optimism last week, though, with Swedish chain H&M vowing to create 7,000 jobs and open 225 new stores during 2009. Wal-Mart's UK subsidiary Asda also bucked the trend by saying 7,000 jobs would be created in the UK this year.
However, as the realities of the economic downturn unfold in the US, their repercussions are likely to be far reaching - not least for exporters.
Indeed, trade organisations and world leaders at last week's World Economic Forum (WEF) in Davos, Switzerland, warned against allowing protectionism to creep in during the downturn. If it did then the consequences for textile and garment makers would be far worse, they said.
But while some are concerned about how a financial crisis, change of president and proposed US$819bn fiscal stimulus plan might change the global equation, there is cause for optimism too. The early stages of Obama's presidency have been met with the exact ingredient the world's economy has lacked of late - confidence - while the fiscal stimulus plan should eventually ease pressure from creditors.
And while the recent layoffs in the US are regrettable for all concerned, the cost saving measures are designed to create more scaled-down and sustainable business models.
Nevertheless, last week saw the US fashion retail business slip into reverse, and this truly global industry needs the country's new leadership to put the brakes on fast.
By Joe Ayling, news editor.
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