As the coronavirus outbreak continues to hit retail hard, The TJX Companies is the latest retailer to announce furloughs and executive pay cuts.
In a Securities and Exchange Commission filing today, the TJ Maxx and Marshalls parent said it 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. According to its website, TJX operates more than 4,300 stores with roughly 270,000 associates.
In tandem, TJX’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 time period.
TJX stores have been closed since March 19, and its e-commerce operations are also temporarily shut. Similar to other retailers — including Macy’s, Nordstrom and DSW — TJX paid associates during an initial closure period but has now decided to furlough workers as shutdowns extend without a clear end date in sight.
“TJX is a fundamentally strong company, and throughout our 43-year history, we have weathered many challenging environments together with our associates and our loyal customers. I want to extend my deep appreciation to each and every one of our associates around the world for their understanding as we navigate these unprecedented times,” Herrman said in a statement. “I look forward to the future when we can reopen our stores and e-commerce operations and welcome back our associates and loyal customers.”
Over the past few years, amid broader industry struggles, off-price has been a bright spot in the brick-and-mortar retail space, something executives and analysts have attributed to its “treasure hunt” experience that cannot easily be replicated online.
Thus, TJX Companies Inc. and other off-pricers, including Ross Stores Inc. and Burlington Stores Inc., have focused predominantly on their physical stores despite retail’s broader push into digital, with Burlington announcing in April that it would wind down its online business. For this reason, TJX was downgraded to an “A” rating from “A+” by S&P Global earlier this month.
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