Retailers are staffing back up, but are still in for a long slog through the coronavirus crisis.
The sector added a seasonally adjusted 258,300 jobs last month, compared with June, to employ 14.8 million — but is still down 913,000 jobs since February. And the broader economy brought back 1.8 millions jobs. The unemployment rate fell to 10.2 percent from 11.1 percent in June.
Nearly half of the retail job gains for the month came from apparel and accessories specialty stores, which added a seasonally adjusted 120,800 jobs last month to employ 924,500. Department stores increased payrolls by 45,100 to 1 million.
Despite the improvement, the still-troubling unemployment figures play into a rough cycle that is made all the more brutal by the coronavirus and is bearing down on fashion and the broader economy.
People without jobs have less money to spend on fashion and no need to dress up for work. That pressures retailers, which in turn pull back, which puts more people out of work and so on. COVID-19 has amplified the effect, shocking the system with an immediate shutdown that left workers at home and stores empty and supercharging already powerful trends in the industry, from the broader adoption of e-commerce to the casualization of sartorial life.
The effect is to create an unforgiving business climate that amplifies any misstep, whether it be a big bet on a new acquisition or the misfortune of operating in a downtrending sector.
Among the latest to get trapped were Lord & Taylor parent Le Tote, which took a big gamble by buying the department store last year, and Tailored Brands, which already was selling suits in a sweat pant world. Both of those companies filed for bankruptcy on Sunday. While Tailored Brands was trimming down and will likely pull back even more, Le Tote is hoping for a sale, but planning for a liquidation — feeding back into the cycle.
Even retailers that are managing to stay afloat through the crisis are expected to muddle along. Moody’s Investors Service said Thursday it doesn’t expect operating profits in retail to come back to pre-COVID-19 levels until 2022 — at the earliest.