Ross Furloughs Workers, CEO and Chairman to Forfeit Salaries Amidst Coronavirus Crisis
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As the coronavirus crisis continues, Ross Stores is the latest retailer to announce furloughs.
The Dublin, Calif.-based chain announced today that it will temporarily furlough the majority of its store and distribution center associates, as well as some other employees across the business, beginning on April 5 and “until operations can resume in their areas.” While furloughed, employees will continue to receive scheduled health benefits with Ross to cover premiums during this time. Workers placed on unpaid leave will be eligible to apply for unemployment benefits.
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Additionally, CEO Barbara Rentler and Chairman Michael Balmuth will forgo salaries while employees are furloughed. Other members of the senior executive team are also taking pay cuts of 20% to 50%. Further salary reductions will be “cascading down to all associates through a certain level.” Members of the board will not receive their cash retainer during this time.
“Our decision to furlough associates was difficult but necessary as we navigate through this unprecedented situation,” said Rentler in a statement. “Our objective with these actions today is to strengthen our ability to navigate through the challenges and uncertainty created by the COVID-19 pandemic for communities and businesses across the country.”
Ross’ fleet of stores has been closed since March 20. The company initially planned to reopen on April 4 but has extended closures as the coronavirus continues to spread.
Over the past few years, amid broader industry struggles, off-price has been a bright spot in the brick-and-mortar retail space — something executives and analysts have attributed to its “treasure hunt” experience that cannot easily be replicated online. For this reason, Ross and fellow off-pricers The TJX Companies Inc. and Burlington Stores Inc. have focused predominantly on their physical stores despite retail’s broader push into digital, with Burlington announcing in April that it would wind down its online business. Ross, meanwhile, announced plans last month to open roughly 100 stores — 75 Ross Dress for Less and 25 dd’s Discounts locations — in 2020. But a limited e-commerce presence combined with a downturn in discretionary spending could weigh on off-pricers’ balance sheets, analysts say.
For the fourth quarter of 2019, Ross delivered earnings per share that climbed 7% to $1.28, compared with consensus bets of $1.25, on profits of $456 million. Revenues also beat estimates, growing 7.45% to $4.4 billion, verses estimates of $4.36 billion.
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