DFS Galleria ‘lets go’ of managers

Saipan’s DFS Galleria has ‘let go’ some of its managers as DFS Group Limited decided to cut its management workforce on all of its U.S. outlets due to various factors, including reduced flights from Japan.

DFS projects that the situation will not improve in the near future. Reduced flights from Japan, following the pullout of Japan Airlines from Saipan, have resulted in “drastic decline” in sales.

There were reports that at least six Saipan managers would be affected by the furlough. Saipan’s DFS president, Marian Aldan-Pierce, refused to make any comment, releasing instead the statement of the company’s U.S. Group president, Julian Levy. It remained unclear at press time if Pierce herself would be affected by the management workforce reduction.

Levy said in a written statement to employees that the management workforce reduction would be implemented on each U.S. Group division on a limited basis, citing also the weakening Japanese yen, among other external factors.

DFS claims to be the largest travel retailer in the world, selling luxury and contemporary fashion brands and catering mainly to travelers. The company’s U.S. group, which has its headquarters in Honolulu, has operations not only in Hawaii and Saipan, but also on Guam, Palau, and the U.S. mainland. DFS also has airport outlets on Saipan, Los Angeles, Maui, Miami, New York (JFK), San Francisco, and San Jose.

DFS also has the Asia group, which has its headquarters in Singapore. The Asia group has operations in Tokyo, Hong Kong, Singapore, Bali, New Zealand, Australia, Taiwan, Korea, Okinawa, and New Caledonia.

Levy said a decline in the number of flights from Japan, especially to Saipan, has resulted in the decision to reduce the company’s workforce in the United States and Pacific territories. In the case of Hawaii, Levy noted that there has been a decline in the number of hotel rooms. He said those factors have caused a rapid decline in the company’s sales in the last few months.

“We do not believe that this trend will improve in the immediate future,” Levy said. “U.S. Group management has taken various measures to reduce costs to reflect this new business reality. As part of this program, we will be reducing our management workforce, on a very limited basis, in each U.S. Group division.”

“Unfortunately, ours is the type of business that is easily impacted by events beyond our control. However, we believe that with these cost management programs in place, we can expect to have a profitable and productive 2006. I look forward to working with you to achieve that result and I thank you, in advance, for your support during this challenging time,” Levy added.

Japanese arrivals to the CNMI continue to decline after JAL’s termination of its regular direct flights from Tokyo and Osaka to Saipan sometime last October. The significant drop in Japanese arrivals to the CNMI in November has resulted in an overall decline in the Commonwealth’s tourism industry, based on recent visitor arrival statistics released by the Marianas Visitors Authority.