The coronavirus pandemic has hit the retail industry hard — forcing many companies to temporarily shutter brick-and-mortar outposts with no clear end date in sight.
The unprecedented crisis has prompted some retailers to tap into credit lines to maintain their cash flow, and a growing number of executives have announced that they will take pay cuts or forgo salaries for the time being. While many retailers were prepared to pay their workers for a two-week closure period, numerous companies have made the often difficult decision to furlough a portion of their workforce while stores remain shuttered.
As of Tuesday, hundreds of thousands of retail workers have been placed on temporary unpaid leave. Below, FN provides live updates about retailers across the fashion and footwear industries that have announced furloughs.
Topshop parent Arcadia Group announced that it has furloughed all store employees effective March 21, with the “majority” of head office employees to be furloughed beginning April 5. Members of Arcadia Group’s board and senior leadership team are set to take pay cuts ranging from 25% to 50%. CEO Ian Grabiner will forfeit his salary and benefits until further notice.
Caleres announced on April 2 that is laying off and furloughing staff in its retail stores, distribution centers and corporate operations. Furloughed employees will continue to receive health-care benefits, and Caleres will pay both employee and company premiums during the period. The owner of Sam Edelman, Vionic, Allen Edmonds and other brands said the remaining workforce, including the executive leadership team, would see “a meaningful salary reduction.”
Capri Holdings Ltd. will furlough its entire North American retail staff of roughly 7,000 workers beginning on April 11. Furloughed workers will continue to receive scheduled benefits. Chairman and CEO John Idol will be forfeiting his salary, along with Michael Kors’ namesake founder and chief creative officer Michael Kors, Versace chief creative officer Donatella Versace and Jimmy Choo chief creative officer Sandra Choi. The Capri board of directors will see their cash pay reduced by 50%. Additionally, the company is “exploring” opportunities to reduce salaries for other employees by about 20% and anticipates reducing its corporate workforce in the future.
All Carter’s store employees were furloughed on April 3. While furloughed, employees will continue to receive scheduled benefits. The children’s apparel purveyor has also announced furloughs and cuts to its office-based staff, as well as temporary salary reductions.
Designer Brands Inc.
In a March 25 Securities and Exchange Commission filing, Designer Brands Inc. said it would furlough 80% of its workforce beginning March 29. For nearly all employees not placed on leave, the DSW parent is implementing pay cuts, with base pay for executive officers to be decreased by 20% and cash retainers for non-employee directors on its board to be reduced by 20%. New hires and all merit increases have also been frozen.
As its stores remain closed until further notice, Express is furloughing most store associates and a number of corporate employees starting April 1. At the same time, it will continue to provide health-care benefits for eligible workers. Beyond the temporary layoffs, the company is “significantly” reducing expenses, capital expenditures and inventory receipts, as well as suspending merit bonuses for the year. It will also freeze hiring during the crisis.
Gap Inc. announced on March 30 that it will place the majority of its store teams in the U.S. and Canada on furlough, but employees remain eligible for applicable benefits during this time. The company has also decided to reduce the headcount of its corporate positions, and the entire leadership team and board of directors are taking a temporary pay cut.
Genesco announced on April 6 that it will furlough employees and cut staff at its corporate headquarters, call centers and distribution centers in a bid to offset “the negative financial and operational impacts of COVID-19 and improve liquidity.” Additionally, the Journeys parent said that highly paid staffers will have their pay reduced on a graduated scale, with certain perks, such as 401(K) matches, also temporarily halted. President and CEO Mimi Vaughn will not take a salary beyond benefits, with other top managers also forgoing pay for now.
Guess is furloughing all store associates in the United States and Canada beginning on April 2, along with most distribution center employees in the region and about half of corporate employees. Health insurance premiums for eligible workers will continue to be covered during this time. The brand is also implementing pay cuts for management-level corporate employees, ranging from 15% for those at lower levels to 70% for CEO Carlos Alberini and Chief Creative Officer Paul Marciano.
Beginning on April 2, JCPenney will furlough the majority of its hourly associates. Starting on April 5, the company will also furlough a “significant portion” of employees at its Plano, Texas, headquarters and at corporate offices in Salt Lake City and New York, as well as its salaried store associates. Employees who have been furloughed will continue to receive scheduled health benefits.
Kohl’s is furloughing store and store distribution center associates, as well as some corporate office employees “whose work has been significantly reduced by the store closures,” the company announced on March 30. Furloughed workers will continue to receive existing health benefits. CEO Michelle Gass has chosen to forfeit her salary during this time.
Macy’s Inc. announced on March 31 that it would furlough the majority of employees while doors across the Macy’s, Macy’s Backstage, Market by Macy’s, Bloomingdale’s, Bloomingdale’s the Outlet and Bluemercury banners remain shut. Furloughed workers will continue to receive health benefits. Meanwhile, Chairman and CEO Jeff Gennette is forgoing his salary starting April 1. The company also said it will reduce the salaries of its management team; all employees at the director-level and above are expected to take pay reductions that could last “for the duration of the crisis.”
Neiman Marcus has decided to furlough or cut pay for a “large portion” of its organization, it announced on March 30. The company has extended store closures through at least April 30 across the Neiman, Last Call and Bergdorf Goodman banners and will reassess whether furloughs continue as the end of April approaches. CEO Geoffroy van Raemdonck will forgo a salary during these furloughs. Executives who report directly to him are also waiving a “significant amount of their salary.”
On March 25, Nordstrom announced that it would furlough a portion of its corporate staff for a six-week period if closures extend beyond April 5. The Seattle-based retailer did not specify the number of people impacted by the furloughs but said it would require a smaller workforce while doors remain shut. Erik and Pete Nordstrom are forfeiting their own salaries from April to September. The company’s executive leadership will also forgo a portion of their compensation. Additionally, all members of the Nordstrom board will not receive cash pay for six months.
Ross is furloughing the majority of its store and distribution center associates, as well as some other employees across the business, beginning on April 5 and “until operations can resume in their areas.” While furloughed, employees will continue to receive scheduled health benefits and Ross will cover premiums during this time. Additionally, CEO Barbara Rentler and Chairman Michael Balmuth will forgo salaries while employees are furloughed. Other members of the senior executive team are also taking pay cuts of 20% to 50%. Further salary reductions will be “cascading down to all associates through a certain level.” Members of the board will not receive their cash retainer during this time.
Saks Fifth Ave.
Hudson’s Bay Co.-owned Saks Fifth Ave. announced on April 3 that it has made the decision to put “a significant number” of its associates on furlough as its stores remain temporarily closed. Saks first announced the temporary closure of its stores on March 17. Furloughed associates will receive health benefits and Saks will cover the associates’ premiums.
Stage Stores has placed “virtually all” of its employees across stores, field support roles and distribution centers on unpaid leave until further notice. Eighty associates “who perform essential functions” have not been put on furlough. Employees who are on furlough will continue to receive health and welfare benefits. Additionally, members of the company’s executive leadership team will see their pay reduced by at least 25%; the cuts will remain in effect for a yet to be announced period.
Steven Madden Ltd. has announced plans to furlough a “significant” number of workers beginning on April 1. Employees who earn more than $100,000 annually will see their salaries reduced by graduated amounts. Workers will continue to receive scheduled medical benefits. Meanwhile, founder and creative chief Steve Madden and Chairman and CEO Edward Rosenfeld will both waive their salaries for the time being. The salaries of the company’s president, CFO, COO and merchandising chief will be cut by 30%.
The TJX Companies
The TJX Companies is furloughing the “majority” of its store and distribution center workers in the U.S. beginning on April 11 — with eligible employees to continue receiving benefits during this time. The company says it is taking “comparable” actions with respect to a portion of its non-U.S. workforce and is working to reopen stores as soon as it believes it can safely do so. In tandem, the Marshalls and TJ Maxx parent’s executive team will take pay cuts from April 12 through July 4. CEO and president Ernie Herrman and executive chairman Carol Meyrowitz have agreed to reduce their base pay by 30%, with other executive officers to take 20% pay cuts. Additionally, members of the board of directors will see cash retainer fees reduced during this period.
Urban Outfitters Inc.
Since March 14, Urban Outfitters Inc.’s banners, including the namesake Urban Outfitters, Anthropologie and Free People, have been closed to the public, but it had continued to provide pay and benefits to all store associates impacted by the closures. Although its digital business is still up and running, the retail firm on March 31 noted “lower overall demand” in its business and said it would furlough for 60 days a “substantial number” of remote employees as well as workers in its stores and wholesale operations. That said, they will retain their benefits during the two-month period. Senior leaders will also take home reduced pay for the duration of the furlough, while the board of directors will not receive cash compensation for the remainder of the fiscal year.
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