Montreal radio station CJAD is reporting that it has spoken to an “ex-employee who did not wish to be identified” who is verifying the implementation of mass layoffs without notice at online fashion retailer Beyond the Rack, which are impacting the company’s New York office and U.S. warehouses.
“He just started calling people into their offices and there were mass layoffs. It was across the board, it was our merchandising team, our tech team, our customer service,” said the ex-employee, who contacted CJAD News via its [email protected] news tipline.
The layoffs include no severance, owing to the fact that if an employer offers a six-month temporary layoff with the prospect of an eventual return, they don’t need to provide notice or pay severance.
“He just said, ‘There’s no easy way to say this, we’re going through tough financial times, there’s no money and so we’re going to have to temporarily lay you off.’ The company line that we were told was that ‘it’s a temporary layoff with the hope to bring you back within six months’ and they know that it’s because they don’t have to give you severance packages that way.”
The ex-employee told CJAD that they felt bad news had been in the works for several months now.
“Raises were cut last year, raises were going to be cut again this year, there wasn’t even a cost of living and they already paid a lot of the regular staff below market price,” they said.
Regularly hailed as a best-in-class eCommerce pioneer, Beyond the Rack has long been regarded as one of Canada’s online retail success stories, profiled frequently for its internet marketing savvy while brick-and-mortar shops across Canada began either closing left and right after a lengthy run, think Future Shop, or flopping on impact, think Target.
Meanwhile, Beyond the Rack’s ex-employee has a theory about what might be causing the company’s current difficulties.
“The customer base was there, the sales numbers were there but they weren’t making the right decisions,” they said. “If you have an office in Manhattan where the rent is astronomical and you can’t pay your bills, don’t rent an office in Manhattan,” adding, “We’ve never been able to dig ourselves out of the hole.”
Expensive Manhattan office space may be seen as table stakes in the fashion industry, but it also may not be the sole reason for Beyond the Rack’s woes.
Last month, The Fashion Law reported that Beyond the Rack was being sued by Gucci, alleging that the website was selling fake Gucci bags.
The lawsuit, filed in the Southern District of New York Court, alleges that Beyond the Rack “recently promoted, advertised, distributed, offered for sale and/or sold a line of [at least four] unauthorized bags bearing an exact replica of Gucci’s registered Interlocking Non-Facing GG Monogram (or a mark substantially indistinguishable therefrom) and the registered GUCCI mark, including sale via its website located at www.beyondtherack.com.”
Contacted by CJAD News, Beyond the Rack VP of Marketing Richard Cohene said that the company could not answer questions at this time, but instead offered, “The morale is positive despite the changes and we are trying to restructure in an effort to maintain operations,” before adding that a public statement would be issued soon.
The frustrated ex-employee struck a Willy Loman-esque tone finally, saying, “It’s painful when you’ve put in so much time, heart and soul, gone above and beyond with a promise that you’re working towards something and they just kind of, feels like they just throw you aside,” adding, “You’re just a number.”