Neiman Marcus Group on Tuesday said it is extending the temporary closure of all stores to "at least April 30" and at the same time is furloughing workers and cutting executive pay.
CEO Geoffroy van Raemdonck is forgoing his salary entirely, and those reporting to him are waiving "a significant amount of their salary," according to a statement from him emailed to Retail Dive.
Southern retailer Belk is similarly keeping stores shut and temporarily furloughing "certain store and home office associates," who will continue to receive health benefits. Those still working will take a pay cut, with the most senior taking "reductions up to 50%," according to an emailed statement. The department store has also established a fund to provide one-time grants to Belk employees in need.
Department stores, which have largely abandoned sales outside of clothing, were struggling well before COVID-19 shook up retail.
During the second week of March for example, Nordstrom and Neiman Marcus experienced the most severe traffic declines among apparel retailers, with Nordstrom footfall dropping 43% and Neiman dropping 41.4%, according to foot traffic analytics firm Placer.ai. With stores shut in hopes of helping to slow the outbreak, traffic is now at zero.
Neiman Marcus, among those most heavily burdened by debt, has also reportedly been mulling a bankruptcy filing. The privately held retailer last year extended some loan maturities, then managed to lighten its load enough to end reports to the Securities and Exchange Commission, but retains around $4.5 billion in debt.
Although the company didn't address that rumor, a spokesperson told Retail Dive last week that the company is "evaluating all courses of action to preserve our financial strength" amid the pandemic.
Last month the retailer, which also runs Bergdorf Goodman, announced the shutdown of its Last Call off-price operation, slashing 500 jobs there as well as laying off 250 store employees. Late last year the company also cut 100 corporate jobs.
Belk, meanwhile, now owned by private equity firm Sycamore Partners, laid off workers in February, according to the Associated Press. The downsizing came after announcing store remodels and a fleet expansion just a few years before. Private equity ownership has added debt to a total that in 2019 stood at $1.6 billion, due this year, according to an earlier Pitchbook report.