Coach, Kate Spade New York, and Stuart Weitzman brand owner Tapestry Inc is cutting jobs and taking steps to minimise costs as it moves to strengthen itself financially amid the deepening global impact of the Covid-19 pandemic.
The group has announced several measures to try and mitigate the impact of the outbreak to its business, including tightly managing inventories by reflowing late spring and early summer product introductions and cancelling inventory receipts for late summer/early fall 2020; reducing CAPEX by delaying or cancelling new store openings, and increasing investment in digital; and “right-sizing” its marketing spend.
In terms of organisational costs, it is reducing its retail workforce in North America by approximately 2,100 part-time store associates across its three brands effective 25 April. Tapestry said these employees will receive a one-time payment of US$1,000 to reduce the financial burden of this action. While after 30 May, most assistant store managers and sales associates at stores that have not reopened will be furloughed.
On the corporate front, the board of directors will see a 50% reduction in cash compensation and CEO Jide Zeitlin will take a salary cut of 50% starting fiscal 2021 for 12 months.
In addition, all North America corporate employees above a certain salary threshold will take a 5-20% salary cut. The company plans to achieve similar compensation reductions outside North America through similar measures. No bonuses or merit salary increases will be paid out.
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“With the passage of time, we are facing increasing pressure on the financial performance of the business, requiring us to make difficult decisions to ensure that Tapestry and its brands continue to thrive well into the future. These decisions are balanced with numerous steps to moderate the impact of the current environment on our people,” Zeitlin said.
