J.C. Penney announces job cuts
The move comes as J.C. Penney meets works with lenders after filing for Chapter 11 in May. It has struggled for years with falling foot traffic, merchandise issues and connecting with its core customer—problems that have been exacerbated by the COVID-19 pandemic. The department store operator previously announced in May that it would shutter about 29% of its stores, joining a larger retrenchment taking place in the retail sector.
The company confirmed to Bloomberg news the 152 store closures announced Wednesday were part of the previously planned closures.
Court papers showed that J.C. Penny now has until July 31 to get approval from lenders for a new business plan. That’s an extension from the original July 14 deadline.
Macy’s executives get $9 million in bonuses after 3,900 jobs cut
It has been a grim year for the retailer, whose difficulties have been exacerbated by enforced store lockdowns to stave off the coronavirus pandemic. A month before the lockdowns began, the company said it would close 125 department stores—a quarter of its total—and lay off a few thousand workers. And on June 25, Gennette announced another 3,900 job cuts in corporate and management roles.
The economic effects of the pandemic have ripped through the retail industry, which for years has fought to cope with changing consumer behavior and a shift to online shopping. Neiman Marcus (No. 41), J.C. Penney Co. and others have filed for bankruptcy, while many more have cut jobs both in stores and at the corporate level.
Macy’s top executives typically receive their annual equity allotments in mid-March, but the board delayed those grants this year, the company said in an emailed statement. Instead they were granted last week.
The statement didn’t address questions about the board’s decision to delay the awards but said that it will be explained in next year’s proxy.
On July 1, the board also reversed top executives’ temporary salary reductions that had been in place since April. That means Gennette, who took no salary for that period, is now back at his $1.3 million annual rate.
Executive compensation tends to be decoupled from job cuts and broader organizational shifts in a company. Senior executives usually receive most of their pay in equity awards like restricted stock or options, which rise and fall in value in tandem with share prices.
In the past, Macy’s has handed top bosses stock options and performance shares that are tied to goals. But the awards handed to to Gennette and his five deputies last week will be theirs as long as they remain on their jobs for a few years, regardless of the firm’s results.
Burberry to cut 500 jobs globally
Burberry Group Plc, No. 83 in the Digital Commerce 360 Europe 500, said it will cut 500 jobs globally to cut costs after lockdowns caused sales to plunge by almost half in the past quarter.
The British fashion house said comparable retail sales fell 45% in the quarter and predicted that the pandemic will continue to hurt performance in the current period. COVID-19 prompted luxury boutiques to shut around the world, and in some markets consumers are only now venturing back onto shopping streets.
The job cuts include 150 office positions in the U.K. or about 4% of the company’s headcount in Britain. Burberry currently employs about 10,000 worldwide. The luxury brand also plans 55 million pounds ($69 million) in new savings on top of a previous 140 million-pound target. Bloomberg News reported on Tuesday that Burberry planned a reorganization that would include job cuts in the head office.
The company behind the iconic trenchcoat announced last week that it would consolidate its offerings around ready-to-wear, accessories and shoes as it aims to elevate the quality of its products while becoming more agile. The reorganization is part of a plan put in place by CEO Marco Gobbetti, whose urgency has grown with the onset of the coronavirus pandemic.
“We’re putting further focus on the products” with the reorganization changes announced last week, Julie Brown, chief financial officer, said during a call with journalists on Wednesday. The job cuts in the U.K. will not impact retail or manufacturing teams, she said.
Outside the U.K., the roles affected will be office-based, but there will be an “element of retail efficiency,” she said.
The pandemic has hit Burberry’s turnaround plans after the company hired designer Riccardo Tisci, formerly of French fashion house Givenchy, in 2018. With Tisci, Burberry has been trying to woo millennials and younger shoppers, adding to its accessories line and trying to move its image upmarket.
Burberry, along with the broader luxury industry, faces a challenge: The majority of the industry’s sales rely on physical stores. The lessons from the lockdowns are set to accelerate a digital shift to get more customers to spend that way.
The company didn’t provide a full-year guidance but expects the current quarter ending September will “continue to be materially impacted by the pandemic.”Favorite