The company announced today that it will furlough all store associates in the U.S. and Canada beginning on April 2. About 50% of corporate employees in the U.S. and Canada, will also be placed on unpaid leave, along with most associates at Guess distribution centers in the region. The brand will continue to cover health insurance premiums for eligible furloughed workers.
Additionally, Guess is reducing pay for all management-level corporate employees. The cuts range from 15% for those at lower levels, up to 70% for CEO Carlos Alberini and Chief Creative Officer Paul Marciano.
“These are some of the most difficult decisions our company has had to make in our entire four-decade history. And while many of these decisions have proven very challenging, by far the hardest one is the decision to furlough our associates. We will make every effort to bring our team members back to their jobs as soon as we possibly can,” Alberini said in a statement. “In these unprecedented times, I can assure you that we are working relentlessly to protect the well-being of our Guess family, our associates, customers and the communities we serve, while preserving the long-term health of the company for all of our stakeholders. We are confident that with these aggressive and immediate actions, we are putting the company in the best position for future success.”
Guess stores in the U.S. and Canada have been shut until further notice “to help ensure the health, safety and well-being” of employees and customers. Amid the closures, the company says it has made “substantial reductions” in overall expenses, including cuts to store occupancy costs and capital expenditures as well as reduced inventory purchases.
To maintain liquidity amid the unprecedented situation, Guess has drawn down approximately $212 million from its credit facilities and has postponed its decision on whether to distribute its quarterly cash dividend for the first quarter of the 2021 fiscal year.
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