The beauty industry isn't just preaching about slimming down anymore. Nowadays, it's taking its own advice too. Britishbeautyblogger blogged about Space NK dropping a PR like a hot potato last week and, just tonight, we've heard rumours (unconfirmed) through the beauty grapevine that Wholeman [editor's note: definitely NOT Mankind... it was Wholeman source meant.] has shuttered its doors for good. Can anyone confirm? Is it true? The site seems to still be up but we were told that the staff were all let go at once.
Big Cosmetic seems to be feeling the pinch from a changing industry too. L’Oreal confirmed gradual but significant job cuts worldwide. Estee Lauder also announced 2,000 job cuts over the next 2 years, following one of the worst holiday seasons it has seen in a long time (due, in large part, to a slump sales IN STORE and on fragrance. People just aren't going to the bricks and mortar shops the way they used to). Lastly, chemicals company Clariant International is said to be cutting 1,000 jobs as part of its plan for 2009... and we bet there are more to come.
What the papers don't say (or at least, it's not implied in the headlines) is that even though sales might be down year-on-year that DOES NOT MEAN THEY'RE NOT MAKING A PROFIT! (double negative, I know. Sue me... it's to make a point) They are! It's just less than they forecasted they would make. And if you're making billions IN PROFIT (not just turnover or revenue, as is the case with most big cosmetics companies) a year in profit, all of those Doomsday headlines screaming PROFITS FALL! FORECASTS WRONG! mean nothing other than there is no such thing as infinite positive growth in an economy (ever heard of a bubble... and the inevitable bursting of it eventually? Yeah, that's what it's referring to. Idiots doing business on the assumption that positive growth will last 4EVR). Economies contract, they expand... that's the way it works. It can't have positive growth forever, so quit your bitchin' Big Cosmetic. In fact, we think we know of a great way to keep making the mo' honey... maybe changing retail models a tad, no? We won't detail our thoughts on that right now (lest we cause some rage) but have a think... innovation is king right now. Just because your ROIC isn't measuring up to expectations set in the unrealistic situation that prevailed over the last four years, doesn't mean you need to drop the truly talent on his/her ass (unless, of course s/he is dead weight... in which case, well, they were probably going to get the axe anyway, right? Well, that's a lie too. Dead weight hangs around for years, but in a perfect world...). You're bank's going to be owned by the government; no reason why you shouldn't embrace socialism too.
Sharing it around is not the way today's version (or any version, I think) of free market capitalism works... winner takes all in this world, baby, and that usually means sayonara to the worker bees, especially when times get a bit tough.