(Bloomberg)—Macy’s Inc., which closed all of its stores on March 18 in response to the coronavirus pandemic, said it would furlough the majority of its workers starting April 1.
The company employs about 130,000, including staff in its luxury chain Bloomingdale’s and its Bluemercury stores. It will keep a smaller workforce to maintain basic operations, such as its digital business, distribution centers and call centers.
“While the digital business remains open, we have lost the majority of our sales due to the store closures,” the company said in a statement posted on its website on Monday.
Macy’s said that during the furlough, workers will not receive salary or hourly wages but will continue to receive health benefit coverage if they are currently part of the company’s sponsored plan, according to company filings. Non-furloughed employees at the director-level and above will have a pay cut, while CEO Jeff Gennette and the board of directors will receive no cash compensation during this time.
Macy’s isn’t the only retailer contending with the pandemic that has caused bricks-and-mortar retail to nearly grind to a halt in the U.S. Thousands of stores have gone dark in an attempt to stem the spread of the virus. In the past few days, initial estimates of when stores would reopen have been pushed back, with some closed indefinitely.
President Trump on Sunday told Americans to expect to maintain social distancing measures until the end of April. Macy’s said workers should be expected to be furloughed through May and those who are enrolled in health benefits will continue to receive them.
Macy’s is No. 5 in the 2019 Digital Commerce 360 Top 1000.
Neiman Marcus to furlough employees and extend store closures
The luxury retailer’s Neiman Marcus, Bergdorf Goodman and Last Call stores will stay shut at least until April 30, according to a statement sent to Bloomberg. A “large portion” of the organization “will either be put on furlough or take temporary salary reductions,” CEO Geoffroy van Raemdonck said.
The decision will go into effect on April 5 and last through April 30, with the potential for an extension, according to the company. Neiman employs around 14,000 employees, a large portion of which will either be put on furlough or take temporary salary reductions.
Like other retailers, Neiman is bracing for a potential slump tied to the virus outbreak. The company continues to serve its customers through online channels.
“We have already taken a number of actions to protect our business, but we’re now required to take employment-related actions,” van Raemdonck said in the statement. He will waive 100% of his own salary to support the business, along with other direct reports who will not get a “significant amount” of their own salary during the furloughs, he said.
The Dallas-based company has struggled to find its footing as shopper traffic to malls and department stores declines. It’s spending to retool so it can meet changing consumer tastes, while also carrying a costly debt load.