WASHINGTON — Department stores cut 13,600 positions, and specialty stores reduced payrolls by 1,200 in April, the Labor Department said Friday, as the national employment picture remained difficult.
This story first appeared in the May 11, 2009 issue of WWD. Subscribe Today.
Department stores employed 1.52 million people in April, and specialty stores employed 1.43 million. While employment levels for apparel retailers have fluctuated month-to-month recently, they have shrunk in the longer term. In year-to-year comparisons, department store payrolls declined 3.7 percent, or 58,000 positions, from April 2008. Specialty clothing stores cut 61,000 jobs, driving a 4.1 percent year-over-year drop.
“Retailers are getting hit from every end,” said Richard Yamarone, director of economic research at Argus Research Corp. “They had a great deal of inventory to get out of storerooms and off of shelves, and at the same time they faced decreased traffic. It was a combination of poor performance for retailers. If you don’t have the customer walking through the aisles, there’s no need to have service people there. That’s what happened at retail, and it will probably continue through the summer.”
Same-store sales results in April were slightly better than expected, driven by a later Easter, Yamarone said. The results are unlikely to have a positive impact on employment levels, he said. Back-to-school provides the next bright spot for retailers, but consumers may be reluctant to spend, he said.
The overall economy shed 539,000 jobs, and the unemployment rate rose to 8.9 percent from 8.5 percent. A total of 5.7 million jobs have been lost since the recession started in December 2007. However, April employment figures did come in slightly ahead of expectations.
Nigel Gault, chief U.S. economist at IHS Global Insight, said, “A 539,000 drop in payrolls would normally be considered as a horrendous decline, but it’s a huge improvement on the peak 741,000 decline we saw in January and marks a shift in momentum. The labor market is still deteriorating, but the rate of decline is moderating.”
The April decline in employment was the smallest in six months. Payrolls fell 699,000 in March and 631,000 in February. The peak decline was in January.
Continuing their long-term decline, textile and apparel manufacturers shed 6,700 jobs in April. Apparel mills cut 3,900 positions to employ 169,100. Textile mills manufacturing apparel fabric eliminated 600 jobs to employ 127,600. Home furnishing fabric manufacturers, known as textile product mills, cut 2,200 positions to employ 127,200.