by Michael Keenan, Edge City Design
Many large retail companies, including several important industry customers, announced they are furloughing store and corporate employees this week.
In addition, several have said they are extending payment terms to vendors. Many others, such as Urban Outfitters, are cancelling or delaying orders and asking for price concessions on remaining ones, which is bad news for industry brands that already have warehouses full of goods.
When retail closures first hit, many large retail companies said they would continue to pay store employees for two weeks or so of closures.
Now that the crisis is continuing, companies are having to take more drastic measures.
Today, Urban Outfitters announced it is furloughing a “substantial” number of store, wholesale and home office employees for 60 days. The company has a total of 24,000 employees.
Urban Outfitters is also:
Suspending the payment of rent temporarily and delaying or canceling some planned new store openings,
Extending payment terms for both merchandise and non-merchandise vendor invoices,
Suspending hiring, eliminating bonuses for FY’21 and delaying all merit raises,
Borrowing $220 million to further protect its cash reserves,
Reducing its capital budget by over $100 million by delaying or cancelling projects,
Adjusting inventory levels by cancelling or delaying many orders and asking for price concessions on those remaining,
Reducing all non-payroll expenses, including creative, marketing, and travel to name a few,
Reducing investments in its growth initiatives such as Nuuly and expansion into China,
Reducing senior leadership compensation for the duration of the furlough time period, eliminating Directors’ cash compensation for the remainder of FY’21 and suspending stock buybacks for the foreseeable future.
The Buckle also announced today it will furlough the majority of its store and corporate office employees starting April 5. The small team that will remain working will see reduced salaries.
Those announcements follow ones from Macy’s and The Gap on Monday.
Both Macy’s and The Gap said they are furloughing the majority of their store and corporate employees, and the Gap said it is also laying off corporate staff as well.
Macy’s employees approximately 125,000 people and Gap employees approximately 129,000 people.
Other large retailers and industry customers that have announced furloughs include Tilly’s and Journeys.
Lets us know your thoughts or any ideas on what you or your business is doing during this trying time.
#coronavirus2020 #anoutfitforyou #anoutfitforyouclient #detonatesurf #headstartcaps #fashion #Macys #EdgeCityDesign ________________________
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