Stein Mart Layoffs Result from Cost-Cutting
America’s retail sector woes are continuing as one after another retailer turns to cost-cutting amid declining sales. Stein Mart layoffs are the latest job cuts to hit the retail sector.
Jacksonville, a Florida-based discount retailer of apparel and accessories Stein Mart has just announced nearly 48 job cuts. But this time, it’s not the retail store jobs on the line. Stein Mart is, in fact, cutting jobs at its corporate head office, affecting the four dozen white-collar employees.
The company revealed its cost reduction plans last week, which included the double whammy of dividend suspension and Stein Mart layoffs. Basically, the press release bore bad news for both its employees and its stockholders. Otherwise, cost-reduction announcements are usually hailed by investors.
The retailer said that it was cutting 10% of its workforce at its corporate offices and suspending its quarterly dividend as part of the cost-reduction initiative. The company also shared plans to slash its capital expenditures. All in all, Stein Mart expects to achieve annual cost-savings of $10.0 million from these efforts.
The dire restructuring measures have been undertaken just days ahead of Stein Mart’s third-quarter earnings release. As it appears, the numbers may further disappoint stockholders.
Stein Mart Layoffs Underscore America’s Retail Woes
Stein Mart management has already delivered a pre-warning on its third-quarter earnings, citing a “very challenging retail environment.” The company also blamed it on the two hurricanes—Harvey and Irma—which affected sales in its major markets.
Management is seeing further drops in Stein Mart’s comparable store sales—a key measure to gauge a retailer’s performance. Stein Mart’s comparable store sales have already dropped 6.2% through the first half of the year.
Stein Mart layoffs follow as the American retail industry faces massive disruption from online retailers, most notably Amazon.com, Inc. (NASDAQ:AMZN). Likewise, shifting consumption patterns are playing a significant role as Americans buy fewer clothes and shoes and instead divert that money to travel and food.
Consequently, in America’s highly saturated retail environment, only a handful of retailers are managing to survive what the experts have termed the “retail apocalypse.” The rest are cutting costs, closing stores, laying off employees, or going out of business, altogether.
Stein Mart LayoffsStein Mart layoffs add to the growing retail sector job cuts, which have dominated all other sectors this year. The retailer currently operates about 293 stores across 31 U.S. states and employs a total workforce of 11,000 employees, many of whom feel uncertain about their job security as the retailer continues its retail struggles.
“Stein Mart Announces Cost Reductions,” Stein Mart, October 26, 2017.
“Stein Mart eliminates 48 corporate jobs,” News4Jax, October 30, 2017.