lululemon’s ivivva Store Closings: Do Hearts Stay Open When Business Doors Shut?

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July 21, 2017 | Holly Pennebaker | HCI
photo courtesy ivivva's Facebook page

Just about a year-and-a-half after its Grand Opening, ivivva Kenwood Towne Centre will have closed its doors.

The lululemon athletica-owned, teen-serving company made a loud entrance into Cincinnati’s largest shopping mall on April 22, 2016 with a week of events including a VIP Dance Party with live DJ, an Earth Day celebration, RSVP-only glow-in-the-dark yoga and daily #selfie stations. Young adults and girls packed the house, eager to party, make memories with friends and shop for clothes that are “inspired by active girls, athletic wear made to move.”

As the saying goes, all good things come to an end. The store announced to its team that on Aug. 20, ivivva Kenwood would be no more, shortly after the news hit company wires June 1. Ivivva Kenwood is one of 40 stores set to close by November, 2017.

“While there is some demand for athletic wear for younger girls, the level and frequency of that demand is insufficient to support a network of expensive stores,” GlobalData Retail’s managing director Neil Saunders told Business Vancouver.

As for ivivva’s biggest fans, the news meant no more in-store weekly yoga, community photo shoots, mother-and-daughter sweat sessions, monogramming parties and most importantly – scoring new athletic gear that’s made for unstoppable girls. 

But what about the employees - the team whose passion helps hundreds of girls reach athletic pursuits, big dreams and unique goals?

Even the longest-running ivivva employees experienced a very short tenure with the company, but their time should be valued, and the departure should be handled with the best of practices and highest sensitivity.

Is this culture-rich company doing it right?

Three lululemon People Potential (HR) leaders declined comment when asked about the company’s best practices for handling store closings, so I turned to Harvard Business Review’s Kenneth Freeman, a business management expert of more than 40 years. He believes that leaders will be successful in closing up shop only when they’re heavily engaged in making sure that employees, customers, suppliers and communities are treated with kindness and consideration.

“If employees who lose their jobs are treated impersonally, unfairly or without respect, the productivity and loyalty of their remaining colleagues will suffer,” Freeman said. “And customers and suppliers that feel burned by a shutdown may retaliate against the rest of the company by diverting to competitors.”

There’s certainly a right and wrong way to close an operation. The wrong approach, including rushed decisions, poor leadership and implementation, and withholding of information will result in a turn for the worst.

So let’s look at what’s right – what experts like Freeman consider best practices.

A company that endures the pain of reducing its workforce should treat employees according to the golden rule of ‘treat people like you want to be treated.’ About 40 ivivva teams (some 800 employees) will soon part ways with the lululemon company. Best practice? Give them the dignity, fairness and respect they deserve.

“You can do it in such a way that people will someday say, ‘You know, I once worked for Company X. I didn’t like the fact that they shut my plant down, but I still think it’s a good company.’”

“They should be told why they’re losing their jobs, how the closure will affect them, what you will do to help them land on their feet,” Freeman said.

A checklist to ensure the best transition:

COMMUNICATION

  • Share information about the ‘why’ behind the closing: a drop in demand, financial falls, technological changes, productivity issues, etc.
  • Lives will be turned upside down by the closure so communicate both written and verbally when conveying sensitive messages.
  • Be forthright and have regular meetings so the truth is told – honest and balanced messages. Don’t let rumors run the show.

AUTHENTICITY

  • Top executives’ visible and personal approach is crucial for employees to feel like they’re highly regarded despite the change.
  • If possible, leaders should recognize individual accomplishments and contributions made during their tenure.
  • Offer coaching to help employees digest the shock that comes with a closure – the support can go a long way.
  • Share the confirmed closing date with employees as soon as possible. Your staff will appreciate the heads up.

COMPASSION

  • Leaders should create and maintain a sense of purpose for employees after the closure is announced so they stay engaged and positive.
  • Show gratitude for employee contributions so they understand they’ve done a good job despite the closure.
  • Listen when employees bring ideas to the table. Their fresh look on things could create great possibilities for the company.
  • Help your people find new work. If they can be employed by the company at another location, they can apply for a company within your network, and they can use help improving their resumes, then lend them a hand as an exemplary leader.

CONSIDERATION

  • Keep your promises. If severance policies like compensation, healthcare, retirement, insurance and bonuses are guaranteed according to the employee handbook, then provide those benefits.
  • Practice what you preach. Maintain respect and integrity, a high level of morale and dedication to your team.
  • Design and layout the closing’s planning phases, and each step that’s involved. Allow employees to see what they can expect and when.

Employment brand reflects the culture of your organization and your talent management philosophy. Whether hired for his/her unique character and background, interesting story, specialized skills or ideal fit for your culture, each employee brought something special. Once they step foot into the job market and become active candidates, that ‘something special’ will be up for grabs.

As we learned in our earliest professional development, never burn your bridges. Company doors might close for good, but its relationships, credibility, memories and reputation are forever lasting.

As Freeman puts it, managing a closure and maintaining a positive, highly-respected employment brand requires considerable judgment.

“We need to have a business when we’re through,” he said of his fight against Wall Street analysts who told him to close as quickly as possible. “We’re going to proceed in a deliberate manner, making sure that we take care of our customers and our employees.”

The process turned into a 3-year deal, instead of the planned three months, but Freeman said the value added in the end made it all worthwhile.

Employment branding falls under one of HCI’s hot topics for 2017: Acquire the Right Talent.

Five resources to help your employment branding practices become their very best:

RESEARCH: Designing and Refining Talent Acquisition: The Role of Design Thinking in Creating a World-Class Talent Organization

SOLUTION SUITE: Implementing a Comprehensive Employment Brand Strategy

BLOG: Five Ways to Become Customer-Centric without Relinquishing Brand Credibility

WEBCAST: Quick Tips and Tricks for Winning Candidate Experience

PODCAST: Recruiting for Results: Build your Recruiter Brand and Do it Right

 

Either quoted material or data from credible source.