Cara Salpini for Retail Dive
AUTHOR|Cara Salpini
Source: www.retaildive.com, August 2020
Dive Brief:
- Glossier on Friday laid off all retail employees as it decided not to reopen its three stores for the remainder of the year and “possibly for the duration of the pandemic,” CEO Emily Weiss wrote in a company blog post.
- Glossier initially furloughed employees in June, and as it moves to layoffs, staff at its New York and Los Angeles stores will receive 12 weeks of severance and healthcare coverage through October.
- The DTC brand said it recognized that the timing of the closures and layoffs was poor, given current uncertainty around the future of the Federal Pandemic Unemployment Compensation benefit, and called on the government to move quickly. The administration on Saturday authorized $400 per week in unemployment benefits, down from the $600 per week that ended in July.
Dive Insight:
As the pandemic stretches on, leaving many retailers unable or unwilling to reopen stores in certain areas of the U.S., retailers are faced with tough choices around payment obligations like rent and employee salaries.
Glossier initially paid employees during its store closures, finally making the decision to furlough at the beginning of June. But the now five-month-long disruption from the pandemic caused the retailer to make impactful decisions for both its employees and its physical stores.
“Since we closed our stores in March, we’ve strived to make the ‘right next decision’ with a people-first lens, given all the uncertainty surrounding the pandemic,” Weiss said in the post. “In recent months, it’s become clear that we will be living with the health and safety risks of COVID-19 for the remainder of 2020 and likely beyond.”
The trajectory of the pandemic threatens the all-important holiday season, and is hitting financially stable and distressed companies alike. The uncertainty has also meant that the reopening of retail in the U.S. has not been quite the saving grace companies had hoped for after prolonged store closures. Consumers remain wary of shopping in physical stores, and high levels of unemployment could spell bad news for consumers’ willingness to spend.
For Glossier, reopening was made harder by the fact that the brand’s stores are well-known for being experiential playgrounds for beauty lovers. As it is, the touch-and-feel element of retail needs some reimagining to work in the COVID-19 era, and with only a few key physical locations, it may be easier for Glossier to press pause on those stores than try to drastically change the purpose. In the company’s blog post, Weiss highlighted that, as a DTC brand, e-commerce is Glossier’s “primary channel,” and that beauty sales are increasingly moving online. But the company isn’t yet ready to give up on physical retail altogether.
“As a digital-first company, we have always viewed our offline experiences as a channel for connection and community, and that mandate has not changed,” Weiss said in the post. “We will keep working to find new formats for bringing joy to our community in this current environment, while reimagining Glossier retail for the future so that we can reopen with renewed creativity, energy, and scale when it is safe to do so.”
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