Goodwill Closing

[KBear]

Some people will argue that this is management's fault.

My suggestion is to turn the stores over to the employees and let them run it. (Why not? It's a weird business anyway.) That way they can work whatever hours they like and pay themselves salaries however much they want.

The level of management entitlement is sickening and the board of directors should be held accountable for allowing their buddies to bleed the company dry. How can Okine qualify for a US Goodwill scholarship.

"Okine was constantly dipping into the petty cash box (which contained $1,500) for cash to cover her meal expenses and for money to go to the U.S., where she was taking an MBA at the University of Phoenix on a Goodwill International scholarship program. "

Goodwill should fire them all and hire some manager from Value Village to run Goodwill.

 

[MattRoxx]

Smart business people can mitigate against the effects of poor market conditions, but rarely can they completely avoid them. Lots of smart, well run, successful businesses have been wound up over the years. Perhaps Goodwill was not well run. I'm not so sure better management would have mattered.

Only Goodwill Toronto has gone tits up. Other cities are fine. And current "poor market conditions" are very favourable for thrift stores. Dollarama is doing great, and Goodwill had the infrastructure to be 'the Dollarama of clothing'.

This bankruptcy falls entirely on the overpaid and incompetent ex-TCHC management team which had zero retail experience and a proven track record of being irresponsible with money.

 

[Bud Plug]

Only Goodwill Toronto has gone tits up. Other cities are fine. And current "poor market conditions" are very favourable for thrift stores. Dollarama is doing great, and Goodwill had the infrastructure to be 'the Dollarama of clothing'.

This bankruptcy falls entirely on the overpaid and incompetent ex-TCHC management team which had zero retail experience and a proven track record of being irresponsible with money.

One, Goodwill Toronto had higher labour costs and, I would be willing to bet, higher leasing costs than other Ontario Goodwill locations.

Two, how do you know Dollarama is doing great, or if it is, why? Don't confuse market presence with financial success or profitability.

As your post confirms, there is a lot of competition in this sector. Likely there will be winners and losers, but losing doesn't always equal incompetence. Retail sales are definitely down across the board. Economists and politicians are finally admitting that we are in the midst of a recession.

I certainly can't prove Goodwill management made good decisions. But you certainly don't have enough information to conclude that competent management could have saved these stores.

 

[SkyRider]

Will Goodwill become Goodway?

 

[Occasionally]

Did I say incompetent? Should have included "management's nepotism" as another reason for failure.
This group of managers, with zero retail management or operating experience went from ruining TCHC to ruining Goodwill.
Nothing the warehouse and store-level union staff could do would have prevented this bunch of idiots from taking the money and running Goodwill into the ground.

POVERTY INDUSTRY'S REVOLVING DOOR

The ties between TCHC and Goodwill Industries of Toronto run deep. Here is a list of staff who have worked at both TCHC and Goodwill in the past 10 years and their jobs:

Keiko Nakamura

TCHC: 2006-2011, COO and CEO
Goodwill Industries: Late 2011-2016, CEO
Gladys Okine

TCHC: 2007-2012, manager of community economic development
Goodwill Industries: 2012-present, senior director, mission advancement/donations and donor relations
Mitzie Hunter (MPP)

Goodwill Industries: 2002-2009, v-p external relations and corporate secretary
TCHC: 2009-early 2012, CAO
Len Koroneos

TCHC: 2010-2012, CFO and acting CEO (left with a $461Gs-$600Gs package)
Goodwill: July 2015-present, consulting services
Louisa Muffo-Magalhaes

TCHC: 2002-early 2013, human resources consultant
Goodwill: Early 2013-present, manager, HR and organizational development
Steve Curic

TCHC: 2013-2014, HR associate
Goodwill: 2014-present, senior adviser, HR
Jaemar Ivey

TCHC: 2014-2015, admin assistant to director, resident access and support
Goodwill: March-September 2015, co-ordinator people strategy
TCHC: 2015-present, tenant services co-ordinator
Rajesh Kanhai

TCHC: 2008-2010, manager community engagement
Goodwill: September 2014-present, director strategy and operational effectiveness
Julet Allen

TCHC: 1998-2013, youth specialist, children and youth manager, community health manager
Goodwill: 2014-present, clinical case manager
David Chu

Housing Services Corporation: 2004-2012 director, operations and CFO (While at HSC, David’s father, Gordon, worked with Keiko Nakamura at TCHC)
Goodwill: 2012-2015, vice-president business services

What a sham. No wonder Goodwill went under. Never trust a government employee to run a private sector company.

That's why it's often very hard for a government worker to get a job in the private sector....

- Bad attitude
- Wastes resources
- Lots of complaining about holidays, carryover benefits etc....
- Clock watcher
- Zero real world business acumen. I don't care how many law degrees and political science diplomas they have. Very easy to work in government and hike taxes to increase revenues as 99.99% of people just pay it. Only a small number will actually pack their bags and leave the country. The real business world isn't so easy. And even with free donated products to sell and $4M of government grants (topping up revenues from $23M to $27M), still can't hack it. Name one sizable company out there which gets a government injection equal to about 18% of sales

On the plus side, people who need cheap used clothing can go to VV or Talize. Stuff is better.

 

[Bud Plug]

On the plus side, people who need cheap used clothing can go to VV or Talize. Stuff is better.

Bingo! Thanks for help in pointing out that there are a number of factors behind Goodwill's demise, including (and importantly) having bigger competitors with better products.

 

[fuji]

Bingo! Thanks for help in pointing out that there are a number of factors behind Goodwill's demise, including (and importantly) having bigger competitors with better products.

While there must certainly be some truth to that, there's also plenty of evidence of managerial incompetence. Other businesses facing that sort of landscape scale back their operations, reduce the number of stores, proactively let go of staff, in order to keep costs in line with revenues. They shrink, and may eventually go bust, but they don't just flame out with $1800 in the bank owing 6 mil. Or if they are going to do that, they telegraph it long in advance and have a controlled shutdown.

Clearly Goodwill Toronto was mismanaged. Under good management facing the same challenges we would have seen them scale back to a smaller operation.

 

[Bud Plug]

While there must certainly be some truth to that, there's also plenty of evidence of managerial incompetence. Other businesses facing that sort of landscape scale back their operations, reduce the number of stores, proactively let go of staff, in order to keep costs in line with revenues. They shrink, and may eventually go bust, but they don't just flame out with $1800 in the bank owing 6 mil. Or if they are going to do that, they telegraph it long in advance and have a controlled shutdown.

Clearly Goodwill Toronto was mismanaged. Under good management facing the same challenges we would have seen them scale back to a smaller operation.

Yet, that is exactly what happened. Goodwill did only reduce a number of stores. The unsustainable Toronto locations that all had similar problems. As to retiring their debts, almost all companies go into bankruptcy owing more than they have in assets. That's what bankruptcy is for, and bankruptcy is hardly rare. They are making a proposal to creditors at this time. This is the normal course of bankruptcy.

Businesses come and go as markets come and go. Even old, good hearted, employee friendly Mr. Fezziwig had to sell out lock, stock, and barrel. It would appear that the Goodwill model (hire employees with special needs, rely on government grants, less quality control on inventory, less focus on inventory, move slower than the competition when it comes to expanding locations, don't sell any new (budget) goods (like VV's Halloween goods)) couldn't cut it on the cost base that having a unionized workforce in Toronto created.

It's just too lazy to point to "look at all the ex public servants running the place" as the explanation for their collapse. Just who do you think that thrift stores can attract into accepting management jobs? Not the same group that Fortune 500 companies can attract, that's for sure.

There are assets to sell, leases to sublet. The company has not just closed its door and made a run for an extradition haven.

 

[fuji]

Goodwillv international isn't Goodwill Toronto, they are entirely separate. Goodwill international had nothing to do with managing the Toronto stores or the decision to close them.

Goodwill Toronto was poorly managed. When a business is booming a poor manager can hide, but where you really see a difference between a good manager and a bad one is when the going gets tough.

Good managers make tough choices that keep the ship afloat. They let go employees, sometimes very good employees, in order to keep the rest of the business solvent.

A good manager would have reduced the number of locations IN TORONTO and not simply waited for it to fail. The mistakes were made at least a year ago, when there was still room to maneuver.

 

[Bud Plug]

Goodwillv international isn't Goodwill Toronto, they are entirely separate. Goodwill international had nothing to do with managing the Toronto stores or the decision to close them.

Goodwill Toronto was poorly managed. When a business is booming a poor manager can hide, but where you really see a difference between a good manager and a bad one is when the going gets tough.

Good managers make tough choices that keep the ship afloat. They let go employees, sometimes very good employees, in order to keep the rest of the business solvent.

A good manager would have reduced the number of locations IN TORONTO and not simply waited for it to fail. The mistakes were made at least a year ago, when there was still room to maneuver.

Not sure I'm interested enough to fully explain this, but maybe this will help. If a company has a group of locations, generally each location will be treated as a cost centre for purposes of business performance evaluation. If some locations are failing, but others are not (or perhaps could be salvageable if your retail customer base could be consolidated into the remaining locations), you can close just selected locations and the business can carry on. Obviously, in this case there was a determination that none of the locations were sustainable, and an assessment was made that the customer base could not be shifted to other stores to make them more viable (not surprising that that these stores would have a highly localized market, given that it's the thrift business!). In short, you can't downsize in such circumstances, you just have to wind it up all at once (unless you just want to lose even more money).

If you've been following the story, part of the issue is that the union was not prepared to make changes that would allow staff reductions in the affected stores.

However, as I keep saying, it would seem that the more obvious explanation and meaningful (staring everyone in the face) is that the retail market is tight (even in this sector) and Goodwill's competition simply beat them into submission.

 

[SkyRider]

Rumor is that some (all?) Goodwill stores will convert to Goodway stores using unpaid voluntary labor. The unionized former employees will have to look to their union to find them new jobs.

 

[Occasionally]

If you've been following the story, part of the issue is that the union was not prepared to make changes that would allow staff reductions in the affected stores.

The usual "all of nothing" union tactic.

And this time, it's a swing and a miss and everyone strikes out.

By the looks of the employees working at the stores, most will have a tough time getting a job. Everyone holding hands and sticking it to management sounds good on paper ASSUMING management is bluffing and will cave in and pay all costs . But it turns out Goodwill was a sinking ship, so paying costs to keep the union happy sunk the ship.

The better thing to do years back would be for the collective union employees to allow them to pare expenses. At least Goodwill could perhaps survive more years. The employees there don't seem like the sharpest knives in the drawer, but they should know that their employment ability is low. In that case, bite the bullet, let some people go or cut back hours, but at least most people will still be employed.

Not every union hold firm. Sometimes they concede for the sake of keeping the company alive. But who knew Goodwill's union would hold such a strong hand. But in this case, both dealer and player lost.

 

[Bud Plug]

The usual "all of nothing" union tactic.

And this time, it's a swing and a miss and everyone strikes out.

By the looks of the employees working at the stores, most will have a tough time getting a job. Everyone holding hands and sticking it to management sounds good on paper ASSUMING management is bluffing and will cave in and pay all costs . But it turns out Goodwill was a sinking ship, so paying costs to keep the union happy sunk the ship.

The better thing to do years back would be for the collective union employees to allow them to pare expenses. At least Goodwill could perhaps survive more years. The employees there don't seem like the sharpest knives in the drawer, but they should know that their employment ability is low. In that case, bite the bullet, let some people go or cut back hours, but at least most people will still be employed.

Not every union hold firm. Sometimes they concede for the sake of keeping the company alive. But who knew Goodwill's union would hold such a strong hand. But in this case, both dealer and player lost.

The problem that every union faces when companies enter "survival mode" is that the union had to sell employees the idea that the company can't be trusted in order for the workplace to become unionized in the first place. As a result, even when the union realizes that the employer is in real trouble, unions inevitably find it impossible to reverse field and convince employees that "now you really have to trust what the employer is saying". Understanding this dilemma, few unions are even willing to try in order to save at least some of the jobs. They get less flack from their membership, amazingly, by simply going down in flames, claiming that the employer is lying/just trying to break the union/etc. to the bitter end.

That's why the rate of unionization in all workplaces (other than in the public service and extended public service) continues to fall. Unionized jobs are lost in the private sector and are not being replaced by new unionized jobs.

 

[KBear]

The better thing to do years back would be for the collective union employees to allow them to pare expenses.

Convincing the union to accept concessions would be a hard sell when the CEO is pissing money away jetting around to take courses in the US, hiring her buddies as (assuming) high priced consultants.

 

[lucky_blue]

 

[Occasionally]

The problem that every union faces when companies enter "survival mode" is that the union had to sell employees the idea that the company can't be trusted in order for the workplace to become unionized in the first place. As a result, even when the union realizes that the employer is in real trouble, unions inevitably find it impossible to reverse field and convince employees that "now you really have to trust what the employer is saying". Understanding this dilemma, few unions are even willing to try in order to save at least some of the jobs. They get less flack from their membership, amazingly, by simply going down in flames, claiming that the employer is lying/just trying to break the union/etc. to the bitter end.

That's why the rate of unionization in all workplaces (other than in the public service and extended public service) continues to fall. Unionized jobs are lost in the private sector and are not being replaced by new unionized jobs.

Thank god I'm not a union employee. The attitudes are out of whack. You pay union dues and get some tard representing you, while you sit back in the shadows. Screw that.

In my personal experience, the only business related issue I've endured that had to directly intertwine with the union guys in the warehouse was years back. We're a public company and everyone in the office knows making a quarter is important. The warehouse was some reason backlogged and not shipping orders out the door to make the month was at risk. So the VP asked anyone in the office to go to the warehouse and help the warehouse manager (good guy, non-unionized, willing to take on help from any dept in the building and understood what was at stake). So what happened?

You'd think for the sake of helping the company make a quarter "all hands on deck" right?

Nope.

Dodgy union warehouse guys didn't let us do anything. Not even do basic stuff like wrap skids, order pick (for the office people who had experience doing that as they originally worked in the warehouse), help out putting skids by the loading bays, so the warehouse guys can focus on forklift stuff and loading trucks etc....

So much for team effort.