Rivers management has informed the 90 full-time staff and 40 casual staff that production at its three Ballarat sites would shut down.
“They are being made redundant as a consequence of a decision to consolidate Rivers’ logistics and supply chain,” Rivers spokesman Steve Murphy told AAP.
Rivers’ warehouses on Hill Street, Yarrowee Street and Pickers Street will cease operations in the next few months, he said.
“That’s where the job losses are centred,” Murphy said.
The company will retain 24 back-of-house positions in Ballarat, with no job losses at Rivers’ retail outlets.
The move comes two years after the brand was sold to Specialty Fashion Group (SFG), owner of Katies and Millers, for just $5 million.
In August SFG reported a full year loss of $4.5 million after being dragged into the red by its Rivers stores.
SFG CEO, Gary Perlstein, said shutting down warehouse operations in Ballarat was part of Rivers’ turnaround.
“The turnaround of Rivers is a priority that requires some tough decisions about how we do business in the future,” the CEO said in a statement.
Sydney is the group’s preferred location, Perlstein said.
Inside Retail spoke with Perlstein last month about getting Rivers back “on the path to profitability.”
“Obviously Rivers is taking that little bit longer than what we thought,” Perlstein told Inside Retail Weekly in August. “Rivers has been difficult for us in the past year, but essentially the worst is behind us. We see the path to profitability of the business in 2017.
“Our key objective throughout our journey remains to be a leading omnichannel retailer, whereby we compete on brand and customer engagement rather than discounting all the time.”
According to SFG, the Rivers turnaround has been based around five key pillars – product management, staffing, marketing, supply chain management, and store performance.
As well as slashing the amount of discounting instore, Perlstein said the group plans to open new Rivers stores once the chain returns to profitability, which he is predicting to be within the next 12 months.
“We’ve already started reducing the amount of discounting we do in Rivers and we will, over time, phase more of that out. Our product has greatly improved in terms of the quality.”
A new Rivers store format and design has already been finalised, with prototype fixtures and fittings currently being tested. Once fully trialled, successful elements of the design will be rolled out.
“We believe we can open stores from the current 150 stores, some stores that we believe aren’t in the right location we will be shifting them, but we will have more stores over the next five to seven years. We believe we can open another 100 stores,” Perlstein said.