Dive Brief:
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The TJX Companies, which runs TJ Maxx, Marshalls and other off-price businesses, on April 12 will implement furloughs for most store and distribution center workers in the U.S. and Canada, with benefits for eligible employees continuing at no cost to them, according to a Securities and Exchange Commission filing. The closure of those facilities is extended indefinitely beyond the previously anticipated two-week closure in mid-March.
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Store workers will be paid through April 11 before furloughs begin. As of Feb. 1 globally, the company had about 286,000 employees, many who "work less than 40 hours per week," most in its more than 4,500 retail stores in nine countries, according to its most recent annual report, filed last month. The majority of its stores — 3,290 — are in the U.S.
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The retailer April 12 to July 4 will also cut executive pay, per Tuesday's filing. The base salaries of CEO Ernie Herrman and Executive Chairman Carol Meyrowitz will be reduced 30%, other executives by 20%, and "other senior executives" by unstated amounts. Board members have also agreed to cash retainer reductions.
Dive Insight:
Until now, off-price retail has been immune to many of retail's toughest challenges. The various players, including those in TJX's stable, are opening stores as other retailers face the need to downsize, and manage to sell plenty of clothing at a time when apparel sales growth is ebbing.
But the sector has not been able to escape the consequences of the COVID-19 outbreak, which has forced the temporary closure of stores and distribution centers in order to foster the social distancing necessary to slow the contagion.
"While we have been making decisions we would never want to make, we are living through a global pandemic," Herrman wrote in a message published Tuesday. "We are making every effort to prepare for re-openings, as soon as we believe we can operate safely in the communities we serve. I look forward to the future when we can reopen and be able to provide work and pay once again to many thousands of Associates worldwide."
TJX's banners, like its rivals in the space, have long emphasized brick-and-mortar sales over e-commerce because the treasure hunt inherent in the constantly refreshed merchandise is more conducive to shopping in stores. Marshalls added e-commerce only last year, and TJ Maxx in 2013. But the company's e-commerce sites are now shut down as well, Herrman said in his letter.
The company's pay and benefit policies, like the cadence of any store reopenings, differ by location. Globally that reflects different countries' support systems. After furloughs begin, U.S. workers can access unemployment benefits, Herrman said. In Europe and Australia, the company is working to "participate in government employee assistance programs," in order to keep employees on its payroll, Herrman said.
via https://ift.tt/2Jn9P8X by Daphne Howland, Khareem Sudlow
