Macy’s, Gap, Kohl’s and Neiman Marcus are together furloughing more than a quarter of a million retail workers nationwide as the impact of COVID-19 on the nation’s day-to-day economy both spreads and deepens.
“Most major retail companies that closed stores in mid-March had said they would pay employees for two weeks until more was known about coronavirus pandemic in the U.S. As companies come to the end of that two-week period, retailers are shifting to furloughs,” Maria Halkias writes for The Dallas Morning News.
Macy’s, which closed all of its 775 stores earlier this month and is furloughing a majority of its 125,000 employees, yesterday “painted a bleak picture of its already perilous financial situation. The company said that it has lost a ‘majority’ of sales because of the brick-and-mortar closures and has implemented other changes to bolster its bottom line, including drawing down its credit line and freezing hiring and spending,” Jordan Valinsky reports for CNN Business.
Kohl’s is furloughing about 85,000 of its approximately 122,000 employees, according to company spokeswoman Julia Fennelly. The company has 1,159 stores,” CNBC’s Melissa Repko writes.
“Kohl’s has tried to manage expenses by cutting capital expenditures by approximately $500 million, trimming expenses across marketing and operations, temporarily suspending stock buybacks and evaluating whether it should pay dividends,” Repko continues.
“Macy’s said it would maintain the ‘absolute minimum’ workforce needed to maintain basic operations across its Macy’s, Bloomingdales and Bluemercury brands. The retailer added there would be fewer furloughs in its digital business, supporting distribution centers and call centers, while Kohl’s said it would start buy online and pick up-at-store services later this week,” Reuters’ Aishwarya Venugopal writes.
“Gap will temporarily stop paying nearly 80,000 out of 129,000 employees in the U.S. and Canada who had been working at stores until they closed two weeks ago. The company has 76 stores in Illinois across its Gap, Old Navy, Banana Republic and Athleta brands. Some corporate employees have also been affected, and the company’s leadership and board will take a temporary pay cut, Gap said Monday,” Lauren Zumbach writes for the Chicago Tribune.
Luxury retailer Neiman Marcus, meanwhile, says its namesake stores, as well as its Bergdorf Goodman and Last Call operations, will stay shut at least until April 30. A “large portion” of the organization “will either be put on furlough or take temporary salary reductions” after April 5, CEO Geoffroy van Raemdonck says in a statement, reports Bloomberg’s Katherine Doherty.
The Dallas-based retailer has about 14,000 employees. It shut its stores on March 18. “Store closings will likely continue beyond April 30,” von Raemdonck said in his statement, “to protect the health and safety of our customers and our associates.”
Neiman Marcus’ van Raemdonck, Kohl’s Michelle Gass and Macy’s Jeff Gennette and are among those chief executives who are waiving their salaries during the crisis.
“The parent company of Ann Taylor and Lane Bryant is also furloughing all store associates and half its corporate staff. Ascena Retail Group Inc. will continue paying benefits to furloughed employees. It is also cutting executive pay. As of Aug. 3, it employed 53,000 people,” Suzanne Kapner writes for The Wall Street Journal.
In addition, “L Brands, which owns Victoria’s Secret and Bath & Body Works, said it would furlough most store staff and ‘those who are not currently working to support the online businesses or who cannot work from home’ starting April 5. Nordstrom said last week that it would furlough ‘a portion of corporate employees’ on April 5 for six weeks. Buzzy start-ups are also under pressure: Rent the Runway laid off its retail employees through a call via Zoom on Friday, while Everlane laid off or furloughed nearly 300 of its workers,” Sapna Maheshwari and Michael Corkery write for The New York Times.
I was looking at a 40-year-old copy of “You,” the erstwhile Sunday “women’s” supplement to the New York Daily News, the other day. The advertising was dominated by the department stores of the day: Alexander’s, Korvettes, Gimbels and Macy’s.
It comes as no surprise, then, that the nation’s largest newspaper chain, Gannett, is requiring “certain employees paid more than $38,000 a year at the company’s more than 100 newspapers, including USA Today … to take one week of unpaid leave in April, May and June, according to a memo obtained by The Washington Post from USA Today Network president Maribel Wadsworth,” WaPo’s Jacob Bogage writes.
“In a separate memo, Gannett chief executive Paul Bascobert told staff on Monday that while subscriptions and audience engagement was up, the company expects revenue to ‘decline considerably’ in the second quarter and that involuntary leave would address the difficulties ‘head on,’” Bogage adds.
“Direct sold advertising has already slowed and many businesses have paused their scheduled marketing campaigns,” Bascobert wrote.