Clothing chain C&A is surprised about the turmoil it is in ever since it revealed its new investment plan. It will remodel every store, but many employees fear this is the first step towards a restructuring plan including layoffs.
Continue to invest
The company decided to shut down several onerous stores and that move sparked concern. “It would be worrisome if we closed stores without investments, but we continue to do so and we will not cut any jobs. This is not an intermediate restructuring plan“, C&A Netherlands’ general manager Marc Estourgie told FD.
Estourgie did admit the chain is also hampered by the turbulent retail climate in the Netherlands, which previously caused V&D’s downfall and put Blokker in a tough spot. “We have struggled as well, but we are still the largest when it comes to the number of items sold. One in eleven Dutch pieces of clothing sold is from C&A.”
Profitability too low
Estourgie says C&A’s market share remained stable, even though he refused to reveal numbers, a subject the chain has almost always carefully avoided. The last time it divulged results, was in 2012, when it managed a 6.8 billion euro turnover. Sales have allegedly dropped since then, but Estourgie says the company managed to halt that slide in 2016.
Regardless of his optimism, there are dark clouds hanging over C&A: the company divested entirely from Turkey and shut down another 23 stores in Spain earlier this year. It also cut 200 jobs in its main offices in Düsseldorf and Vilvoorde.
The company’s major issue is that it is not profitable enough and that is why it will invest 1 billion euro in the next four years to reposition itself. One third of its European stores will be remodeled this year and it expects to triple its online turnover, which currently contributes 8 % to its overall turnover, over the next three years as well.
