Macy’s Inc. will be furloughing most of its employees, starting this week, as Covid-19 continues to batter businesses large and small.
All of the retailer’s stores have been closed since March 18. Macy’s on Monday said its digital business is still open, but the retailer has “lost the majority of our sales due to the store closures.” It also has suspended its dividend, drawn down its credit line and freezed hiring and spending, among other options.
“While these actions have helped, it is not enough,” Macy’s said.
The furloughs also will impact Bloomingdale’s and Bluemercury employees, leaving the “absolute minimum workforce needed to maintain basic operations,” Macy’s said.
The furloughed employees will receive health benefits at least through May, the retailer added, noting that it plans to bring employees back “on a staggered basis.”
Before the coronavirus swept across the country, Macy’s already had been working to improve its financial position.
The troubled retailer, part of a group of department stores hit hard by broader challenges in the retail world, said last month it was shuttering 125 of its worst-performing locations and cutting 2,000 jobs. It also said it would test out a new concept in shopping centers and focus on its planned office development in Midtown Manhattan.
Macy’s stock price was down over 7 percent around 12:30 p.m. Monday. As of the fourth quarter of last year, the company had about 125,000 employees and approximately 775 stores.
In an effort to stave off the spread of Covid-19, scores of retailers have said they were closing stores, including Nike, Nordstrom and Urban Outfitters.
Government-mandated closures of non-essential businesses have accelerated the impact on businesses’ bottom lines, leading to a record number of jobless claims to be filed across the country.
Write to Mary Diduch at md@therealdeal.com