UPDATE: Macy’s is furloughing the majority of its approximately 130,000 employees, according to a company statement. The company said it has lost the majority of sales since its stores closed on March 18, even as it remains open online, making cost cuts necessary. Furloughed employees who are enrolled in health benefits will continue to receive coverage “at least through May,” with the company covering 100% of the premium. Macy’s plans on bringing employees back “on a staggered basis” as business resumes.
The department store reiterated that all stores will remain closed until “we have clear line of sight on when it is safe to reopen.” There will be fewer furloughs in the company’s digital business, distribution centers and call centers.
Macy’s CEO Jeff Gennette will not receive compensation starting April 1 through until the end of the crisis. The retailer also will reduce pay for the period for all executives at management director level and above.
Layoffs and furloughs have been an unfortunate recurring theme across retail as more businesses extend store closures into April due to the coronavirus (COVID-19) outbreak. Rent the Runway has laid off all employees across its five brick-and-mortar stores in California, New York, Chicago and Washington D.C., while another digital native, ThirdLove, laid off the entire retail staff of its now-closed New York pop-up without any notice, according to Vox.
All Rent the Runway stores are currently closed due to the coronavirus pandemic, and the company is not sure when or if they will be able to reopen, according to a report from The Verge. A Rent the Runway executive informed all retail staff during a Zoom meeting that the company had been forced to “dramatically reassess” its current operations in order to sustain the business.
Employees say their email accounts were disabled shortly after the call, which lasted less than 30 minutes. Retail employees are receiving their final paycheck on or before April 3 and hourly employees are being paid for any shifts they had scheduled prior to March 31, the report said. In addition, employees are receiving severance pay and two months of health insurance. The company also sent out an email with details on how to apply for unemployment.
At ThirdLove, approximately 10 people were affected by the layoffs. The staffers initially weren’t offered severance and didn’t even get a phone call, the report said. ThirdLove CEO Heidi Zak told Vox all laid-off retail staffers were offered severance, but didn’t clarify how much.
Stage Stores Furloughs Majority Of Employees As Potential Restructuring Looms
Digital natives with light store footprints aren’t the only retailers dealing with an uncertain future due to extended closures. Stage Stores is putting nearly all employees in its stores, distribution center and call center on unpaid leave after closing the remaining 345 of its stores that were open. The company will continue to pay 80 key employees who are not subject to the furlough because they perform essential functions, though the release did not specify what those roles are. Furloughed employees will not be paid, but they will keep their health and welfare benefits.
Members of the Stage Stores executive leadership team will temporarily have their pay reduced by at least 25% effective March 29, and board of director members will not be compensated during this period. The end of the pay-cut period has yet to be determined.
Stage Stores already is an a precarious position — in February, the Wall Street Journal reported that Stage planned a financial restructuring that could include a bankruptcy filing. The company allegedly was late in paying its vendors. The longer all its stores, which operate under the Bealls, Goody’s, Gordmans, Palais Royal, Peebles and Stage brands, remain closed, the greater the chance that the company files for bankruptcy.
Stage’s stock price fell below $1 per share after the WSJ story published, and it has yet to recover, closing at $0.40 per share on March 27. On March 12, the New York Stock Exchange informed Stage that the company was no longer in compliance with the minimum price per share requirement to maintain its listing. Companies are required to maintain a 30-day average closing price of at least $1 per share. The company has until Sept. 12 to regain compliance.