Estee Lauder announced Thursday it will lay off up to 2,000 employees and close a portion of its 1,500 stores around the world.
The beauty products company said that 10–15 percent of its stores will be shut down.
“Fiscal 2020 was a year without parallel, as we delivered record sales and exceptionally strong adjusted EPS growth in our first half and navigated with agility through an unprecedented pandemic in our second half,” Estée Lauder President Fabrizio Freda said in a statement.
The firm cited the CCP (Chinese Communist Party) virus pandemic as a driving force behind the closures.
Freda added: “In this new fiscal year, we remain focused on the safety and well-being of our employees and consumers. Our sense of urgency to act on our recently announced racial equity commitments is strong. We enter fiscal 2021 with cautious optimism, given the vibrancy of our skincare portfolio, acceleration in Asia/Pacific, momentum online globally, and robust innovation pipeline, which includes the exciting launch this month of Estée Lauder’s new Advanced Night Repair.”
He added that executives expect “sales trends to improve sequentially each quarter.”
Estee Lauder saw a 4 percent decrease in net sales for its fiscal year that ended June 30, according to the company’s statement.
Sales of makeup brands such as M.A.C. and Too Faced have suffered due to a drop in demand in lip products and makeup products, according to Reuters. The overall annual sales fell some 18 percent because the COVID-19 pandemic offset the 5 percent growth in the first part of 2020.
“The Company also estimates the closure of between 10-15 [percent] of its freestanding stores globally, as well as certain less productive department store counters that the Company elects to close,” the firm said.
Fox Business reported that Estee Lauder has about 1,500 stores worldwide, meaning that a 10 to 15 percent closure would result in the shuttering of approximately 150 to 225 stores.
A number of other retailers, clothing stores, and restaurant chains have been forced to declare bankruptcy or shut down stores, with many citing the CCP virus as the main factor.
Earlier this week, NPC International, which franchises Pizza Hut restaurants, went bankrupt. The firm is now slated to close about 300 restaurants across the United States.
And in July, the parent company of Men’s Wearhouse and JoS. A. Bank announced hundreds of store closures and a round of layoffs.
JCPenney, Brooks Brothers, Nordstrom, Pier 1 Imports, and Lucky Brand have announced store closures during the pandemic.