Macy’s Inc, Kohl’s Corp, and Gao, major U.S. retailers are preparing to furlough tens of thousands of employees as they prepare to shut down stores for longer to curb COVID-19 spread.
Kohl’s will also suspend its share buyback program, review its dividend strategy and draw down $1 billion from an existing credit line, joining a growing list of businesses looking to shore up their cash reserves to survive the health crisis financial strike.
Macy’s and Gap suspended their payments, tapping into their credit facilities as well. The furloughed Kohl workers will continue to receive health benefits. Macy’s indicated that health care workers would continue to obtain compensation, at least through May. Macy’s will retain the “absolute minimum” staff required to manage basic operations through its brands Macy’s, Bloomingdales, and Bluemercury. For its new business, the retailer will have less furloughs, helping fulfillment centers and call centers, while Kohl’s will start shopping online and pick up-at-store services later this week.
Widespread lockdowns to arrest the spread of the outbreak in the United States have hammered sales for brick-and-mortar retailers as most stores remain closed, despite their online business staying up and running.