Late yesterday the sun went down on Shoes.com. Two years ago it was an internet darling and tomorrow, it will be a memory.
There are lots of lessons to be learned from the Shoes.com saga.
First, the company had three entities: Shoes.com, OnlineShoes.com, and Shoeme.ca (the Canadian arm of the business-- which also included brick and mortar stores). They set up their primary warehouse in Columbus, Ohio. They had smaller warehouses in Seattle and Vancouver, British Columbia. Most of the product shipped from Columbus, Ohio. In my opinion, this three-entity situation created a lot of problems with cost controls. Consolidation would have been a much wiser way to go.
Second, the company managed the warehouse in Columbus by enlisting the aid of temp services. They used three different temporary work agencies, not one. That created confusion. In my opinion, every wave of new temps in a situation like this increases theft loss, increases a lack of productivity as people get up to speed, and if the temps are not given a full-time, permanent position quickly enough, it leads to a lack of dedication. This latter point can also result in more theft loss as people often think that their job is constantly in jeopardy and they have no vested interest in the profitability and health of the company.
Third, when a company started by a tech-industry entrepreneur grows quickly and does not seek retail professionals to help run the place, choosing, instead, to recruit Millennials who know all about social justice but nothing about running a business, it's a recipe for disaster. Break rooms adorned with pingpong tables, foosball tables, big-screen televisions and X-Box game consoles don't build excitement when you don't turn on the heat in winter until the warehouse temperature dips below forty-five degrees-- that was the policy. The company had lots of customer service complaints, too.
On Friday, January 27th, Shoes.com officially went dark. It's three online entities went offline. Employees in Seattle and Vancouver were shown the door and told that they'd receive pay through the end of the month (gee, four days pay, how generous). Shoes.com employees in the Columbus, Ohio warehouse were told at 9:00 AM that their job was over. The fulfillment side of the warehouse was run by Geodis-- a third-party operator and the second largest logistics company on the planet. Employees of Geodis who shipped material for Shoes.com were not told that they were laid off until after hours-- they were called at home.
Geodis is not to blame. In fact Shoes.com may even owe them money along with all the other companies that Shoes.com cannot pay. Shoes.com will be filing for bankruptcy protection and making plans for liquidation.
One can only speculate whether or not Geodis had any advanced warning about the situation with Shoes.com. I suspect that they did not have much notice. Information I have on the event is that Geodis was asking questions about the health of Shoes.com when they started seeing a huge reduction in freight coming to Columbus, but they weren't getting clear answers. It put Geodis in a real bind considering the time of year and the current business climate.
Geodis employees of the Columbus, Ohio Shoes.com facility will be looking for jobs. Some of them have lots of experience, an array of talents and diverse background. Others have limited skill sets and less experience, but they are young and energetic. If you know any companies looking for talent, spread the word. Post it on Facebook.
Good Luck to All.
