Retailers are trying to preserve their businesses to come back another day.
Macy’s said Monday that it will furlough almost all of its 125,000 employees.
All Macy’s stores have been closed since March 18 and “will remain closed until we have a clear line of sight on when it is safe to reopen,” Macy’s said in a statement.
While its digital business remains open, the retailer said it has lost the majority of its sales due to the temporary closings of its 775 Macy’s, Bloomingdale’s and Blue Mercury stores. Macy’s is preserving more jobs in its online operations, including distribution centers and call centers.
At least through May, Macy’s said furloughed employees who already have health insurance through the company will continue to receive those benefits with 100% of premiums paid.
“We expect to bring colleagues back on a staggered basis as business resumes,” Macy’s said.
Retailers and shops deemed nonessential according to what kind of merchandise they sell have virtually shut down as shelter-in-place orders such as the ones in Dallas County and the city of Dallas continue.
Department stores, sellers of apparel, shoes, accessories, and specialty stores such as The Container Store, are considered nonessential while grocery stores can’t keep their shelves stocked. Walmart, Target, Kroger, Albertsons, Central Market, Whole Foods and Tom Thumb have seen sales soar as shoppers stock up for an unknown period of time.
The Container Store said Monday that it will furlough some of its Coppell-based corporate staff and continue benefits through April 30. Top executives are taking pay cuts. CEO Melissa Reiff is taking a 45% cut, and other executive salaries are being reduced 33%. The company laid off employees at the 40 stores that are closed due to local and state mandates.
Reiff summed up the challenges retailers are facing.
“While these are the most difficult decisions we have made in our company’s history, we have a responsibility to protect the safety of our people while also preserving our long-term ability to offer jobs and benefits to our employees and product and services for our customers,” Reiff said in a statement Monday.
In addition to cutting expenses, companies are drawing down on their lines of credit to create a cash cushion to get through this period. The Container Store, which has more than 1,100 employees in Dallas-Fort Worth, has taken $50 million from its bank line of credit. In recent weeks, Macy’s had drawn down all $1.5 billion in credit. Kohl’s also took out all of its $1 billion credit line.
As of Feb. 1, Plano-based J.C. Penney had $386 million in cash. Its stores are closed and its 3,000 employees that work at it Plano headquarters are working from home.
Plano-based At Home and Dallas-based Tuesday Morning Corp. have also drawn down their lines of credit. At Home took $55 million out from its revolve recently. The last time At Home disclosed its available credit was in January and it was $150.7 million. Tuesday Morning also took out $55 million and still has $91 million available to it in its credit line.
Dallas-based Neiman Marcus, said earlier this month it was closing down its Last Call operation and was combined online and store staffs resulting in 750 job losses.
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