Coronavirus: Thousands of jobs go as shops shut

In one of the blackest days for Australian retail, tens of thousands of jobs were lost and shops prepared to bring down the shutters.

A staff member chains the door of Portmans in Sydney’s CBD. Picture: Nikki Short

In one of the blackest days for Australian retail, tens of thousands of jobs were lost and shops prepared to bring down the shutters, with major chains such as Lovisa, Athlete’s Foot, Portmans, Just Jeans, Peter Alexander, Smiggle, Coach and Strandbags deciding to close.

The casualties quickly mounted. Late on Wednesday Australia’s largest footwear chain owner Accent, whose stores include The Athlete’s Foot, said it would close all its 500 stores at the end of the week, standing down 5000 staff. On Thursday morning the giant Premier Investments said it would close its large portfolio of fashion outlets and send 9000 workers home.

That came on top of the already unveiled decision by pubs group ALH to close and stand down 8000 workers, jeweller Michael Hill announcing the loss of 2500 jobs and fashion retailer Mosaic Brands closing all its stores an putting 6800 jobs in jeopardy.

The coronavirus pandemic is causing carnage in the $320bn sector, which employs more than 1.3 million people, making it the second-biggest pool of jobs in Australia.

Consumers, workers and investors fear there’s much more to come.

Deutsche Bank strategist Tim Baker said the industries most impacted by the closures, including aviation, retail and restaurants, represent about 17 per cent of the nation’s workforce.

“It’s possible Australia’s unemployment rate could swiftly surpass the record 11 per cent reached in the early 1990s recession,” Mr Baker said.

“The duration of such a move is the more important question, but one that’s impossible to answer until there’s abatement in the spread of the virus.”

Accent, which also distributes popular footwear brands such as Dr Martens, Vans and Skechers, will close stores on Friday afternoon for at least four weeks. It said its workers’ health and safety was the top priority.

“This also means that all of the company’s retail employees and the majority of support office employees will be stood down without pay for that period,’’ the company said.

Restrictions imposed to try to contain the coronavirus have left the retail sector in turmoil, with tens of thousands of jobs lost in the last few days.

Accent said it would continue to trade through its 18 websites and its wholesale business during the stand-down period. Employees would continue to accrue entitlements and could access their annual and long service leave entitlements.

Accent CEO Daniel Agostinelli said: “It is with a heavy heart that we have made this decision, but we believe this to be in the best interests of the health and wellbeing of our team members.

“The company intends to do everything possible to return the business to normal operations when environmental conditions normalise while always prioritising the safety and wellbeing of our team.”

Jewellery and accessories retailer Lovisa, which has 430 stores spread across Australia, Asia, Europe and North America, said its stores in Australia, New Zealand and South Africa were now temporarily closed, joining outlets in France, Spain, Malaysia, the US and Britain which have been closed over the past week.

The once thriving global jewellery store said Singapore was the only company-owned market continuing to trade.

“Whilst some governments have provided timing for the current containment measures to end, we are not currently in a position to know when our stores will be able to re-open,’’ the retailer said.

“As a result, the company has taken a number of important actions to manage the cost structure of the business, including the stand-down of store teams in all markets where our stores are closed, and reduction of headcount in our support teams across the world, with a combination of temporary stand-downs and redundancies to ensure teams are appropriately sized to support the temporarily much smaller business during this period.”

Mirroring moves by other ASX-listed retailers, it has also postponed its interim dividend to preserve cash.

The failed Colette by Collette Hayman business will close all of its remaining 93 stores, affecting 210 staff, with the decision triggered by the coronavirus pandemic.

In February the administrators to the collapsed fashion apparel company announced the closure of 33 stores across Australia and New Zealand as part of the process of preparing a 105-store business for sale.

But due to the health crisis the administrators from Deloitte advised staff that trading at all stores would cease from close of business on Thursday until further notice.

Administrator Vaughan Strawbridge said until now he had been able to effectively manage shopfront operations in what was a rapidly changing public health and trading environment. “But the reality is that COVID-19 presents a health risk in a retail environment, and without being able to guarantee a safe environment for store employees, and with their health a priority, we have had to make this decision to cease trading across the 93 store network in Australia.”

The closures will affect approximately 210 permanent staff, plus casuals. Stores in New Zealand have already closed as a result of government directives.

“These are extraordinary times, and there is also no certainty that many retail operators in Australia will be able to continue trading amidst so much uncertainty and with public health measures changing so frequently,” Mr Strawbridge said.

Bags and accessories retailer Strandbags, which has 300 stores, is closing down from Friday and luxury brand Coach is also closing its stores.