VF, PVH and TJX look to deal with coronavirus disruption through further cuts and furloughs

Since the beginning of the week, companies including Genesco, PVH, VF and TJX have announced a range of new measures designed to preserve their liquidity during the ongoing Covid-19 crisis.

Having already implemented furloughs across its U.S. and UK retail staff, Genesco Inc., owner of Journeys, Schuh, and Johnston & Murphy, has announced further furloughs, as well as a reduction in headcount at its Middle Tennessee area corporate offices, call centers and distribution centers.

Through these measures, the company has managed to reduce its workforce by a total of 90% and has also temporarily introduced temporary pay cuts for its more highly paid associates.

In the UK, Genesco’s Schuh business has reopened its e-commerce operations in line with government health and safety guidelines.

The New York-based owner of Calvin Klein and Tommy Hilfiger has announced that around 75% of its retail, corporate and warehouse employees are being put on unpaid furlough or will have their working hours decreased.

Remaining full-time employees in North America will see their salaries temporarily reduced by between 5% and 20% in accordance with their compensation level.

Almost all of the company’s associates in Australia, where its stores and offices have been temporarily shut by government order, will also be furloughed, while the country’s leadership team continues to work from home and has chosen to forego compensation.

PVH is looking into governmental relief packages for its associates in Europe and Brazil, where the company’s stores are also currently closed.

In Asia, where most of PVH’s stores have now reopened, albeit with limited hours and reduced traffic, office associates will receive temporary salary reductions.

The company has also put all hiring on hold, drawn down $750 million from its over $1 billion revolving credit facility and suspended both share repurchases and its cash dividend starting in Q2 2020.

TJX, which owns TJ Maxx, Marshalls, and Home Goods, will continue to provide pay and benefits for its associates in the U.S. and Canada through April 11. After this date, however, the company will move to furlough the majority of its employees in these regions.

In Europe and Australia , the retail group, which employs some 286,000 people across its different businesses, is hoping that assistance plans implemented by governments will allow the company to provide ongoing employment for its associates.

The salaries of TJX’s senior executive leadership will be reduced, including that of CEO Ernie Herman, while compensation for the board of directors has also been decreased.

Vans parent company VF Corporation has committed to providing full pay and benefits for its retail employees until at least May 3, with all corporate associates currently working remotely also continuing to receive their usual compensation.

Store associates in the EMEA region will also continue to receive full pay during this period, but corporate, wholesale and distribution center employees will see their working hours reduced.

In the APAC region, VF’s offices remain closed but its retail stores have reopened and all employees are receiving full pay and benefits.

The company’s distribution centers are still active around the world but are operating with strict social distancing protocols and a range of other preventative measures.

VF is also drawing down the remaining $1 billion available under its senior unsecured revolving credit facility and has suspended its share repurchase program, but is not currently considering the suspension of its dividend program.

VF, PVH and TJX look to deal with coronavirus disruption through further cuts and furloughs

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