NEW YORK — Tapestry — a retail company operating brands under Coach, Kate Spade and Stuart Weitzman — announced it plans to pay full-time employees thru May 30 but will start furloughing part-time employees on April 25.
Tapestry stores have been closed in the U.S. and Europe since March 17 due to the pandemic and it’s unclear when they will reopen.
The company says all stores in Mainland China are now reopen.
Tapestry will try to reduce fixed expenses on rent, saving on procurement services and reducing external third-party services. It will cancel any new inventory for late summer and fall and also eliminate paying stock dividends and share buybacks.
Tapestry says it will try to save money by:
- Extending salary and benefits to the vast majority of its North America retail team through May 30th at which time the Company will furlough most assistant store managers and sales associates where stores have not reopened. This extension will continue to support employees and allow for the swift and safe reopening of stores at the appropriate time;
- Reducing its retail workforce in North America by approximately 2,100 part-time store associates across the three brands effective April 25th. These employees will receive a one-time payment of $1,000 to reduce the financial burden of this action; and
- Applying for available government payroll subsidy programs in various countries to mitigate payroll expense.
Tapestry also plans to cut salaries which are expected to remain in effect for up to 12 months::
- A 50% reduction in cash compensation for the Board of Directors;
- A 50% salary reduction for Chairman and Chief Executive Officer Jide Zeitlin;
- Salary reductions of 5% to 20%, depending on salary level, for all North America corporate employees above a certain salary threshold. The Company plans to achieve similar compensation reductions outside North America through similar measures;
- Cancellation of the Company’s Annual Incentive Plan (AIP) for fiscal year 2020, which will result in no bonuses being paid for the current fiscal year; and
- Elimination of merit salary increases for all employees for fiscal year 2021.