Dive Brief:
-
The Container Store this week laid off about 100 employees, roughly 2.5% of its total workforce, the company told Retail Dive in an email Thursday.
-
The affected employees have been notified by a member of the retailer’s leadership, and are getting severance and support from its human resources team, the company said.
-
The layoffs are the result of close scrutiny of the retailer’s cost structure amid declining sales that have continued into its fourth quarter, which ends March 30.
Dive Insight:
Last month The Container Store lowered its Q4 and full-year guidance and at the time CEO Satish Malhotra pledged "strong discipline with both our promotional strategy and expense management” in light of the company’s top-line slide. He noted particular weakness in the retailer’s core merchandise, which he warned was continuing into the new year.
Also at that point, the company said it expected full-year net sales to land somewhere between $842 million to $847 million, down from its previous guidance of $870 million to $885 million. The company forecast a comp decline in the low 20s, worse than its earlier expectation of a high-teens decline.
“The expected decline in comparable store sales is reflective of weather challenges we have experienced in January as well as continued pullback in our core and value-oriented general merchandise categories,” Chief Financial Officer Jeff Miller told analysts during a Q3 conference call.
That guide also implies selling, general and administrative savings of up to $15 million in the fourth quarter, he said. On Thursday, the company reiterated that the layoffs and other cost-cutting measures are being implemented in response to its sales trends, and to manage cashflow and ensure long-term stability and growth.
The close eye on costs could hamper the company’s expansion plans. The Container Store opened two new locations at the end of last year, and earlier this month said four new built-to-suit locations are in the works for fiscal 2024. However, Miller said the retailer has no plans for new stores beyond 2024.
