PARIS — Facing a steady decline in its mail-order business, La Redoute said Tuesday it would shed up to 672 jobs over the next four years, representing about 13 percent of its total workforce.
This story first appeared in the October 23, 2008 issue of WWD. Subscribe Today.
The French distance retailer, part of French luxury and retail conglomerate PPR’s Redcats division, said the cuts would affect its head office in Roubaix and employees in 81 outlets where customers can order and pick up parcels. Those “points of contact” are to be phased out, while mail handling is to be outsourced.
The largest business in the Redcats group and France’s third largest player in women’s clothing, La Redoute said it would shift its business model to focus on Web sales. It also promised “a more innovative and responsive product offering.”
The brand encompasses apparel, furniture and decorative items.
A La Redoute spokeswoman said the cuts would not affect the number of catalogues distributed, some 12 million, as consumers still like to consult them even if they’re ordering more online. She noted that La Redoute’s site is the third most consulted in France.
In reporting first-half results last month, PPR said La Redoute was hit by strikes, along with lower gross margins and higher marketing costs. The Redcats division reported a 40 percent decline in operating profits and a 0.3 percent slide in revenues.
PPR is slated to report its third-quarter sales on Thursday, with analysts expecting a lackluster performance in its retail holdings, which also include the Fnac record and book chain and Conforama furniture stores.
In a research note, HSBC’s Antoine Belge forecast a 7 percent decline in organic sales at Redcats, deteriorating from the first half, and noted that a tough 2009 outlook for retail “should speed up the process of disposals.”