RETAIL AT RISK
Apr 17, 2020 12:07PM
By Pam Kessler
Retailers furloughed employees and took other drastic measures to shore up liquidity amid the COVID19 crisis. They're also taking a hard look at expenses including rent, wages, and vendor payments.
Urban Outfitters announced it won’t pay rent while its stores remain “temporarily closed until further notice" due to the continued spread of COVID-19. The company, whose brands also include Anthropologie and Free People state in a press release, "a substantial number of store, wholesale and home office employees" will be furloughed for 60 days, but continue to get benefits. The restaurant chain Cheesecake Factory also announced plans to withhold rent, as businesses remain closed due to the national stay at home order.
Macy's placed most of its 125,000-person workforce on furlough but committed to providing health benefits through the month of May. The retailer also said all of its Macy's, Bloomingdale's, and other brands will remain closed "until we have clear line of sight on when it is safe to reopen."
J.C. Penney joined the growing list of major retail chains who laid-off employees, continuing health insurance coverage for employees currently enrolled in the retailer’s benefits program. Reuters reported this month the company is considering a possible bankruptcy filing to manage its hefty debt load amid the unprecedented COVID19 pandemic and economic fallout.
Gap Inc. has furloughed 80,000 store workers in the U.S. and Canada, "pausing pay but continuing to offer applicable benefits until stores are able to reopen." According to the press release, Gap says its executives and board are taking a temporary pay cut.
Kohl's is similarly furloughed 85,000 store workers and some corporate workers affiliated with store operations, providing benefits but not pay, according to a recent story in Retail Dive.
Neiman Marcus furloughed its workers and cut executive pay. The luxury department store is rumored to be considering a bankruptcy filing due to its heavy debt burden worsened by the COVID-19 shutdowns.
Nordstrom expressed confidence in its ability to weather “this challenging moment in time” when it closed 380 stores in March. The retailer has offered store employees pay and benefits through April 5.
Best Buy announced the furlough of over 50,000 U.S. hourly store workers, including nearly all of its part-time workforce, starting April 19, according to a company press release. The majority, over 80%, of its full-time store and field employees remain on the payroll.
This article will be continuously updated.