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In fashion, companies are now trying to rebuild the right teams. “There was a lot of hiring during the pandemic because of so much activity online,” said Karen Harvey, the founder of the popular consultancy and advisory firm that sources talent for clients such as Adidas, Calvin Klein and Coach. “Two things are happening right now: economically there is an obligation to downsize the workforce, but at the same time it is important to innovate and focus on areas that have not been focused on before.” [such as the physical retail experience]He said. As companies reach the end of the financial year and begin to evaluate the workforce, certain roles or teams can often seem to be overlooked, leading to widespread layoffs as the teams lack the focus or emphasis of the strategy going forward. He said.
“Many of these companies benefited from a time when people were working from home and doing more online, but now that the consumer is more global, we have a resurgence as people want to engage and shop in a more physical environment,” she continued. They are likely to invest more, she said, adding that overall, she expects hiring to slow as companies become more cautious and rethink their hiring practices.
Luxury is proving more resilient, says Christian Bassett, founder and CEO of LVMH, an executive search consultancy for Prada, Bottega Veneta and Burberry. “We haven’t seen anything like the level of luxury in the luxury sector compared to the technology sector and some other areas,” he said.
Focus on growth drivers
What’s emerging is a correction to what was originally intended, says Christy Hart, founder of the popular fashion and luxury-focused recruiting consultancy, as well as The Co-Lab, a networking community for brand professionals. “Business was booming, and executives were predicting a huge increase in hiring to accommodate the huge growth,” she said. Now, brands are actively cutting costs to stay profitable. “Such a cautious decision seems more strategic than necessary at this point,” she said.
After the epidemic of e-commerce growth, fashion retailers know more than ever that online is not the “silver bullet” it was once thought to be, said Hyman, the analyst. “People thought that if you do business online, you don’t have rent to pay and it must be more profitable,” he said. “The reality is returns are high and will eat into your profits. Making money is not that easy. [by] “Selling Online”
Hyman warns that a company restructuring shows that costs are too high and earnings are too weak… Investing too often is a sign of stress. However, other analysts, such as Streeter, see it as a way to streamline business, reduce costs and create effective business models by focusing on areas that are drivers for company growth.
Growth in areas such as customer service can lead to new job creation, recruiter Hart suggests. “As these companies invest in new categories, they feel they can drive growth in these new business areas and are hiring entirely new teams to support those businesses.”
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