Guess furloughs half U.S. and Canada corporate staff, stores closed indefinitely
Guess is the latest American fashion retailer to announce that it is furloughing a significant part of its store and head office employees, as the Covid-19 crisis forces its stores to stay closed indefinitely.
As of April 2, the apparel and accessories retailer will say goodbye to all of its store associates across the U.S. and Canada. Store associates will stop receiving pay, but will continue to benefit from company-funded health insurance premiums.
Likewise, 50 percent of its North American corporate associates, and most of the associates at its distribution centers in the U.S. and Canada will be let go as of Thursday. The company will also fund health insurance premiums.
To further alleviate the financial impact caused by Covid-19, the company is also implementing temporary tiered salary reductions for all management level corporate employees in the U.S., including both CEO Carlos Alberini and CCO Paul Marciano who will see a 70 percent reduction.
Among other measure, Guess said it has made “substantial reductions” in overall expenses, including cuts to store occupancy costs and capital expenditures, as well as reduced inventory purchases.
“These are some of the most difficult decisions our company has had to make in our entire four-decade history. And while many of these decisions have proven very challenging, by far the hardest one is the decision to furlough our associates,” said Alberini.
“We will make every effort to bring our team members back to their jobs as soon as we possibly can. In these unprecedented times, I can assure you that we are working relentlessly to protect the well-being of our Guess family, our associates, customers and the communities we serve, while preserving the long-term health of the Company for all of our stakeholders. We are confident that with these aggressive and immediate actions we are putting the company in the best position for future success.”
Guess stores have been closed across North America since, March 17.
Guess has drawn down approximately $212 million under certain of its credit facilities and has decided to postpone its decision related to the potential declaration of its quarterly cash dividend for the first quarter of fiscal 2021.
Due to the uncertainty currently surrounding the rapidly evolving pandemic, Guess did not provide financial guidance for the first quarter currently in progress, nor for the full fiscal year ending January 30, 2021.
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