Last week, fashion giant Zara announced that they will be shutting 1,200 of their stores across the globe due to loss of profits during the pandemic. Inditex, the Spanish parent company of Zara, Bershka and Pull & Bear, said it would absorb between 1000-1200 mainly smaller stores, with closures focused in Asia and Europe, particularly China and Spain.
Stores in the UK are less likely to be affected. Inditex also said it plans to concentrate on its online sales going forward. Despite sales dropping 44% between February and April, its online sales grew by 50% during the first quarter of the year. It remains to be seen how successful retailers will be at re-evaluating their business models as we enter a “new normal” where in-store shopping faces some major challenges, such as lower footfall and social distancing restrictions. Retailers looking to place more emphasis on their online store will also have to compete with newer online-only competitors such as Boohoo and Missguided, which have thrived during the pandemic.
While Inditex has promised that the “headcount will remain stable” for its stores, with staff offered jobs in other roles such as dispatching online purchases, other retailers have not been as fortunate. UK fashion retailers such as Monsoon, Accessorise and Quiz are also facing stores closures and unlike Zara do not have as strong an online presence to fall back on. Children’s’ clothing chain Mothercare Ireland, which has been trading since 1992, recently announced they had gone into liquidation. The impact of the pandemic on the family business has led to the closure of its 14 stores across Ireland, with 197 people left jobless. In April, Debenhams announced the permanent closure of its 11 stores across Ireland, incurring the loss of around 2,000 jobs. Many smaller independent businesses have not been able to reopen their stores even now that COVID restrictions have been lifted due to financial difficulties.
With the retail sector making up 14% of employment in Ireland, employing around 280,000 people, it is clear that such store closures will make for difficult times for many people working in Ireland, and students are no exception. According to research conducted by the Irish League of Credit Unions in 2016, more than 2/3 of Irish students take on part-time jobs to fund their third-level education. The closure of retail stores affects students working part-time and at weekends, as well as students who shop in these budget-friendly stores.
The Tribune spoke to a number of students working in retail who had been left jobless as a result of COVID-19. One student, who had been working part-time in Debenhams before the pandemic, told the Tribune that she found out that the retailer was permanently closing down through WhatsApp when her boss confirmed that the rumours were true. She was due to be paid €500 in wages the following week but told us that “none of the part-time staff got paid”. She is thankful that she has been able to avail of the COVID-19 Emergency Payment, which she has been saving, although is now worried about getting hit with a tax bill at the end of the year.
Those who have become unemployed as a result of the pandemic have been able to avail of the COVID Emergency Payment of €350 since March, although this will be reduced to €203 per week for those who were earning less than €200 per week before the pandemic hit. The Revenue has also indicated that the emergency payment will be treated as taxable income and may affect a person’s overall tax liability for the year, although it is not clear how exactly this will work, leaving many part-time works understandably anxious.
3rd-year UCD Radiography student Laura Cleary told the Tribune how she lost her part-time job in Cath Kidston in Kildare Village Outlet with only one day’s notice on 20th of April. Fortunately, the company compensated the employees for the lack of notice. Laura was employed by the UK-based company for 5 years and worked between 12 and 16 hours a week during term time to help pay for her UCD fees and accommodation. None of Cath Kidston’s 60 UK or Irish stores will be re-opening as they will continue solely online, with the loss of 900 jobs.
With the future of in-store shopping uncertain, it remains to be seen how many other Irish students could be similarly impacted and how this will affect their ability to pay for college and related expenses.
Sadhbh O’Muirí – Reporter