Volcom Furloughs Majority of Staff
We are sad to report that the economic shock caused by the coronavirus caused Volcom to furlough 75% of its staff in the U.S. and nearly 100% of its staff in Europe this week.
“We are being proactive across the board because we don’t believe that the market is going to turn around anytime soon and we owe it our employees to not manage the business with optimism,” Volcom told SES in a statement.
“This virus and associated actions are moving so fast that one day feels like a decade, so we had to react swiftly.”
“Approximately 75% of U.S. staff is furloughed and nearly 100% of the European is staff furloughed. The U.S. company is paying all benefit costs and paying out paid time off accruals if requested. The staff will be eligible for unemployment. The EU staff is accessing their governments’ social benefits.”
“Our goal is to bring the staff back but right now, it’s like a free fall. Our offices and retail stores in U.S. and EU are closed until it’s safe to reopen.”
“We have already begun rolling out a plan to support our wholesale partners with more details coming,” Volcom said.
The Volcom team of employees that the industry knows and the operational arm of the business are now part of an independent, standalone company called Liberated Brands. Liberated Brands has the master license for Volcom, while Volcom intellectual property is owned by Authentic Brands Group.
Liberated Brands is mostly owned by the Volcom executive team, which means they are not part of a larger entity that can backstop them in these challenging times, like former owner Kering would have been able to do. Liberated Brands Owners Todd Hymel, Brad Holman and Ryan Immegart are not taking any salary right now.
Businesses everywhere, including in our industry, are scrambling for cash because most revenue has essentially stopped, except for e-commerce in some cases. And in most cases e-commerce sales have dropped precipitously because buying clothing and shoes is not a huge priority right now for most consumers. (See our story from Friday where industry CEOs tell us just how bad business is and what they think will happen.)
To try to raise cash, Volcom is currently offering a 40% off sitewide sale. Many retailers and brands are doing the same thing. For example, Nordstrom is 25% off sitewide, something it rarely does. Tilly’s is also 20% of sitewide, and PacSun is up to 30% off.
There is likely much more of this to come as brands and retailers deal with huge drops in revenue and elevated inventories.
The Volcom team sent us this comment about why they are running the 40% off sale.
“We are taking the appropriate measures to make sure any part of our business that is open remains competitive in this volatile environment. We have always been transparent with our wholesale partners and that will not change moving forward. We are all facing the impacts of this global pandemic that is moving at an unprecedented speed and therefore nearly impossible to get ahead of. We would expect our partners to act accordingly.”
“We have a skeleton crew at our distribution center to keep what little orders we have going out to our wholesale partners and consumers. The crew is taking careful measures to keep safe.”
Our hearts go out to the Volcom team around the world and everyone else in the industry, and outside it, too.