Retailers are continuing to adjust their operations as the COVID-19 outbreak continues, with some seeing more success than others: Tapestry will pay workers at closed stores for the next four weeks; Tailored Brands has been forced to furlough all U.S. store employees and temporarily halt e-Commerce fulfillment; and Walmart is paying its continued success forward by waiving rent for in-store services and smaller distributors.
Tapestry has extended its store closures across North America and Europe to April 10, and will continue evaluating the situation on a biweekly basis, but the retailer will offer aid to associates in the form of pay and benefits for the next four weeks. Meanwhile, operations are returning to normal in China, where nearly all stores have reopened, and other Asian countries, where most stores are open, although operating on shortened hours.
The retailer also is matching up to $10,000 in donations for each individual employee, in addition to a separate charitable contribution by the Coach Foundation and the gift of 15,000 masks to hospitals in the U.S., the UK and Spain. Both the Coach and Kate Spade Foundations are looking to partner with groups for additional charitable actions.
Tapestry also is drawing down $700 million from its $900 million revolving credit facility to add to its cash balances, suspending stock buybacks and quarterly cash dividends and reviewing cost-cutting opportunities in order to stay financially healthy during the remainder of the pandemic.
“We are taking immediate steps to support our employees and local communities,” said Jide Zeitlin, Chairman and CEO of Tapestry in a statement. “In addition, out of an abundance of caution, we have acted to augment our strong liquidity and reinforce our financial flexibility. We have an 80-year history of successfully navigating external crises. Our three brands are powerful and resonate deeply with consumers globally. This, along with the resilience of our teams, underscores our confidence in the future.”
Tailored Brands is having more trouble with the effects of social distancing: the retailer will furlough all U.S. store employees and a “significant portion” of distribution network and office workers. Employees with Senior Vice President or higher titles will take pay cuts, with President and CEO Dinesh Lathi and the company’s board of directors accepting a 50% reduction.
“It was a very difficult decision to furlough employees and one that we did not take lightly; however, this is an important step to ensure the durability of our Company and the livelihood it provides for so many,” said Lathi in a statement. “We are working to support our furloughed employees through our continued benefit programs, information about jobs that may be open in their areas and information on government resources. We will continue to monitor the situation carefully and look forward to bringing our employees back to work as soon as possible.”
Tailored Brands also has temporarily halted its e-Commerce fulfillment operations, on top of its stores being closed until at least May 4. The company is continuing to accept orders as it reviews options for reinstating fulfillment.
Walmart Helps Smaller Partners Survive
Walmart’s position as an essential retailer has kept it healthy during the COVID-19 pandemic, and the retailer is leveraging its success to assist its smaller partners. The retail giant is waiving rent for all Walmart properties for April — a move that will also benefit eye doctors at Sam’s Clubs — totaling more than 10,000 leased spaces across the country.
Additionally, Walmart will adjust its Supply Chain Financing program by adding dedicated resources to speed up the onboarding process, eliminating an eligibility requirement and adding JPMorgan Chase as a partner to help smaller suppliers keep up with demand. More than two-thirds of the retailer’s 18,000 suppliers are expected to benefit from the program.