American luxury designer brand Ralph Lauren is to give furloughs, pay
cuts and foundation donations to ensure the safety and wellbeing of its
employees while it navigates the impacts of Covid-19.
The company said in a statement that executives across the label would
reduce their salaries and compensation including Ralph Lauren, executive
chairman and chief creative officer, who will forego his entire salary for
the fiscal year 2021 in addition to his full fiscal year 2020 bonus. Last
year, Lauren’s salary and bonus was reportedly around 11 million US
dollars.
In addition, Patrice Louvet, chief executive officer and president, will
reduce his salary by 50 percent during the crisis. While all the other 140
members of the executive and global leadership team will reduce their
salaries by 20 percent for the first quarter of fiscal 2021. Plus the
company’s board of directors will forego their quarterly cash compensation
for the first quarter of fiscal 2021.
“The impact of Covid-19 on the world, on our industry and on our
business is profound and wide-reaching,” said Ralph Lauren. “For more than
50 years, we have embraced the idea of timelessness – focusing on what
lasts. It has defined not only our products but our business and our
culture. It has helped guide our actions in both the best and the most
challenging times. And as we face the implications of this global pandemic,
it will remain our guiding principle – so that we will not only endure this
crisis but thrive again for years to come.”
A portion of these compensation reductions will be contributed to its
Employee Relief Fund, administered by the Emergency Assistance Foundation,
to provide grants to employees facing special circumstances and financial
hardships during this time.
This initiative the designer label stated will “build” on the initial 10
million US dollar donation by the Ralph Lauren Corporate Foundation has
been placed into the company’s Employee Relief Fund.
Ralph Lauren to initiate furloughs, pay cuts and other measures to
navigate the impacts of Covid-19
Ralph Lauren added that its store employees in North America have been
compensated since store closures went into effect in mid-March and will
continue to be paid in full through April 11. International store employees
in regions where retail operations are required to remain closed have
received similar compensation to date, as guided by local government
regulations and authorities.
The company said that during this period, all of its store employees
where retail operations are suspended, as well as employees whose jobs are
not conducive to continued remote working, will be placed on unpaid
temporary furlough. This includes the majority of our store employees and a
portion of our corporate employees in North America, Europe and select
other parts of the world.
These employees will continue to receive regular employee benefits,
including health benefits and any government assistance for those eligible.
International store employees in regions where retail operations remain
closed will receive compensation as guided by local governments and
authorities.
“Our hope is to bring our employees back to work as soon as it is safe
and practical,” added the American brand.
The brand also added that all employees, including those placed on
furlough, will have access to the Employee Relief Fund, which provides aid
to employees facing special circumstances and financial hardships during
this time, including medical, eldercare or childcare needs.
Ralph Lauren president and chief executive officer, Patrice Louvet,
added: “We have a great responsibility to all of our stakeholders – our
teams, our consumers, our investors, our partners and the communities who
count on us – to ensure that every decision we make in this unprecedented
global health crisis considers our ability to serve them over the
long-term.
“We have overcome many challenges over the last 53 years because the
Purpose and values of our Company have guided us and enabled us to come out
stronger on the other side. They are our compass in this moment too, as we
make tough decisions in the short-term to position us for continued
long-term strength – as a company, a leader in our industry and an employer
to thousands of people around the world.”
The majority of Ralph Lauren’s retail stores in North America and Europe
will remain temporarily closed due to the global pandemic, with no date set
for reopening, with the company noting that they will “continue to assess
our operations location by location, taking into account the guidance of
local governments and global health organisations to determine when our
operations can begin returning to business”.
However, the company did add that it was “encouraged by the improving
situation in China and South Korea, where most of our retail stores have
reopened, and are applying lessons from the outbreaks in the region to
effectively manage our operations globally”.
The company confirmed that its online businesses remain open and its
fulfilment operations have also resumed following a brief closure period to
enhance health and safety protocols in its distribution centres. This
included extensive deep cleanings, implementation of social distancing
on-site and staggered work shifts and break schedules.
Ralph Lauren updates on company during the coronavirus crisis
As far as supplier payments, the company called its suppliers as
“another critical stakeholder” and in accordance with its responsible
purchasing practices that it would settle payment for finished goods and
goods already in production.
“Understanding that the scale of the ongoing slowdown of future orders
can have a significant impact on our partners’ liquidity, we have a vendor
payments program in place which enables suppliers to receive payments on a
shortened time frame at favourable market rates,” the company added.
Over the long term, the company said it is committed to partnering with
peers, nongovernmental organisations and governments to advocate and
generate new sources of support and long-term job security for factory
workers, while strengthening business in the countries in which it
manufactures its products.
Concluding its statement, the company shared that it “believes the
additional measures are necessary” to “navigate an unprecedented and
dynamic situation” and that it remained focused on the needs of its
employees and safeguarding the business “in order to emerge from this
crisis in a position of strength”.
Image: courtesy of Ralph Lauren
