Kohl’s Corp. has extended the duration of its temporary store closures and will furlough employees to strengthen its financial liquidity.
The workers who will be furloughed are store and store distribution center associates, as well as some corporate office staff whose work has been reduced by the store closures due to the coronavirus. While the retailer will continue to provide existing health benefits to those impacted, the company noted that they may benefit from the $2.2 trillion emergency aid package that President Trump signed into law on Friday. The financial package provides for federal unemployment benefits on top of state benefits for those who are eligible.
Separately, Kohl’s said CEO Michelle Gass will not take a salary.
“We look forward to the day that we can reopen our stores to welcome our associates back and serve the millions of families across the country that shop Kohl’s,” Gass said.
Earlier in March, the company had already fully drew down its $1 billion revolving credit facility to provide liquidity. It has decreased it capital expenditures by $500 million and is managing inventory lower to align with anticipated sales.
“As a company, we operate with great discipline to maintain a strong balance sheet and financial flexibility. Given these extraordinary circumstances, we are taking difficult and decisive actions to strengthen our financial liquidity and secure the financial position of the company for the long-term benefit of our associates, customers and shareholders,” Gass said.
While Kohl’s continues to fill online orders, it is in the same position as most retailers who sell online and find that e-commerce sales aren’t anywhere close to matching the lost sales from brick-and-mortar.
And as retailers are finding that they need to keep stores temporarily closed for an undetermined amount of time, they are also finding that they can’t afford to keep staff on their payroll. Most will continue to pick up health benefits for furloughed workers. On Monday, Macy’s Inc. said it will furlough nearly 130,000 workers. Earlier in the same day, Stage Stores said it too was furloughing staff.
The furloughs are on top the furloughs announced last week by Nordstrom Inc., L Brands Inc. and H&M Group. More retailers are expected to follow suit.