As the coronavirus crisis continues to plague the retail sector, Ralph Lauren has become the latest company to announce widespread furloughs and significant pay cuts across its executive ranks.
The American fashion brand announced yesterday that it would temporarily lay off the majority of its store employees as well as a portion of its corporate employees in North America, Europe and other parts of the world. These workers, who have been compensated since Ralph Lauren stores were shuttered in mid-March, will continue to be paid in full through April 11. After this period, they will not take home any pay while stores remain shuttered, but they will still receive health benefits.
In addition to the furloughs, the company’s C-suite will also see salary reductions: Executive Chairman and Chief Creative Officer Ralph Lauren will forgo his entire pay for fiscal year 2021 in addition to his full fiscal year 2020 bonus. President and CEO Patrice Louvet’s salary will be cut by 50%, while its executive and global leadership teams — a group of 140 business leaders — will take home 20% less for the first quarter of fiscal year 2021. The board of directors will also forgo pay during the same period.
“We have a great responsibility to all of our stakeholders — our teams, our consumers, our investors, our partners and the communities who count on us — to ensure that every decision we make in this unprecedented global health crisis considers our ability to serve them over the long term,” Louvet said in a statement.
Part of the compensation reductions will be directed to the company’s Employee Relief Fund, which provides grants to workers facing financial and other hardships amid the spread of COVID-19. More than 1.36 million people around the world have been diagnosed with the virus, and at least 76,300 have died.
Ralph Lauren is also reassigning some workers to “high-need” roles, including posts related to its efforts to manufacture medical supplies, including masks and gowns for donation. Its stores will remain closed for the time being, with operations to resume on a location-by-location basis.
“The impact of COVID-19 on the world, on our industry and on our business is profound and wide-reaching,” Lauren added. “For more than 50 years, we have embraced the idea of timelessness — focusing on what lasts. … And as we face the implications of this global pandemic, it will remain our guiding principle so that we will not only endure this crisis but thrive again for years to come.”
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