Canada: Shoes.com struggles to keep up growth pace
Vancouver-based Shoes.com has run into a speed bump after years of fast growth and lofty growth projections.
Not only has the online shoe seller laid off hundreds of staff in the past year but it has also fielded multiple lawsuits, mostly from suppliers.
Then there is the empty 2,000-square-foot storefront on Burrard Street that was supposed to open in September but now has no firm opening date because of “permitting problems,” according to Brad Wilson, who was appointed as Shoes.com’s president in September.
Wilson confirmed that the company now has about 200 employees, which is down from about 650 staff little more than a year ago.
He explained that most of the layoffs took place in June, when the company outsourced its fulfilment centres in Columbus, Ohio, and Brampton, Ontario.
Other layoffs across the company came in August and included 22 head office staff and 41 call centre employees.
“Could we outsource some marketing distribution technology in the future? Sure, we could do that but we like the structure we have now,” Wilson said. “There are a number of things that we’re doing that are pretty consistent when a new president or CEO comes in and looks at the business and establishes a path forward.”
He would not elaborate on what other internal changes the company is contemplating.
Earlier this year the company faced lawsuits from the B.C. government and Swim Recruiting in BC Supreme Court. More recent lawsuits in B.C. provincial court include multiple claims from Ignite Technical Resources Ltd. and one from IT MindFinders Search Consultants Inc.
No one from those companies was available to speak with BIV but Wilson said that in all cases the suits either have been settled or now have payment plans in place.
Matt Lindauer, who is creative director at the design firm Rent Control Inc., told BIV on November 2 that he is owed about $15,000 and was frustrated in his attempts to contact Shoes.com.
“I can’t get them on the phone,” he said. “When they tell you that you’re third in line in the queue and then no one picks up for an hour, something’s a little weird.”
Wilson confirmed on November 8 that some of the company’s layoffs had affected workers who answer phones but he said that customers and other stakeholders should be able to get through to a Shoes.com customer service representative when necessary.
Indeed, on November 9, BIV phoned Shoes.com’s switchboard and was able to speak with a representative within two minutes.
That’s good news, said retail analyst and DIG360 principal David Gray.
“Consumers want to have some kind of fallback with a human being if they want to sort something out or ask questions about products or orders,” he said.
“The companies that are doing well with customer service are moving to systems like online chat – interactive chat that is picked up in seconds if not minutes.”
Gray said that he has heard from his contacts that Shoes.com is not on as steep a growth path as the company’s executives thought a year ago.
In August 2015, Shoes.com CEO Roger Hardy told BIV that the company had an annual revenue run rate of $320 million, and that he aimed for that rate to rise to $1 billion by 2020.
Wilson, on November 8, declined to say whether the company’s revenue was growing or to give a projection of what the company’s revenue might be by 2020.
He did say, however, that there are rays of light on the horizon.
Black Friday, on November 25, for example, is likely to be the company’s biggest day for sales this year.
“You get more and more people shifting to online shopping, and we see a cultural trend of people, especially in the U.S., of not wanting to stand in lines and wait for a crazy number of hours trying to get product.”
Source: Business Vancouver
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