Myer sends 10,000 staff home as coronavirus hits retailers

Myer will shut for four weeks from Monday, standing down at least 10,000 staff without pay amid a coronavirus retail downturn.

Myer's Pitt Street Mall store in Sydney. Picture: AAP I

In one of the biggest shocks to the retail sector in a week where tens of thousands of jobs have been lost, the nation’s biggest department store, Myer, has decided to close its stores for four weeks and stand down 10,000 staff.

It is a bitter blow for the 120 year old retailer and Australia’s biggest department store, and is the latest casualty from the health crisis.

It follows Thursday’s decision by Premier Investments, owner of chains like Just Jeans, Portmans, Dotti and Smiggle, to close down in the wake of the coronavirus pandemic with the loss of 9000 jobs.

But the closure of Myer is the biggest deathknell to an already embattled retail sector with many now looking to David Jones to see when it will close.

Myer said late on Friday night the health and wellbeing of customers, team members, their families and the broader communities in which they operate remains Myer’s absolute priority.

“We are, therefore, fully supportive of the various measures undertaken by both governments, and their respective agencies, to prevent the spread of COVID-19 through social isolation and distancing measures, including staying at home, wherever possible.”

As such, Myer said it will temporarily close all stores from the close of business on Sunday, for an initial period of four weeks until April 27.

Myer will continue to operate all online businesses, while ensuring a safe and hygienic environment for those team members.

Myer has reduced the threshold for free delivery to $49 per order and has relaxed the returns policy.

Myer said it has also made the “difficult decision” to stand down approximately 10,000 team members across the store network and Store Support Office, from March 30 March.

“As team members will not be working, they will not be paid during this period of imposed closure. “Full time and part time members will have greater flexibility to access their annual leave and long service entitlements, in addition to government assistance measures.

“Our thoughts are with our team members, and their families, as we know this will be a difficult period, and, in addition to offering free counselling and support, we will look at further ways to support their health and wellbeing during this time.”

A small group of business-critical roles will be maintained to undertake essential work during the period and to support our online businesses, Myer said.

These roles will operate on an equivalent of 80 per cent of their normal salaries and contracted hours.

Myer chief executive John King, along with all of the executive team members, have opted to not receive any remuneration during this period, but will continue to work in their respective roles.

“As reported at our half-year results, significant headway has been made in strengthening our balance sheet and reducing debt. These measures have ensured we are in a stronger position to deal with this unprecedented situation.

“We are now taking all necessary measures to minimise our cost base, including engaging in ongoing discussions with suppliers and landlords.”

Mr King, said: “The decision to temporarily close all Myer stores and stand down so many loyal and dedicated team members is one of the toughest decisions this Company has faced in its 120 years of operation.

“Our focus must remain on operating our business in a manner that protects the health and wellbeing of customers and team members, whilst supporting the government, and the communities in which we operate, in limiting the spread of COVID-19.”

Australia’s biggest retailers are jumping ahead of any government ruling on store closures in the midst of the coronavirus pandemic to close down shops and lay off staff as they strive to preserve cash in what could be months of nationwide lockdown.

Outdoor adventure wear and equipment retailer Kathmandu is the latest to close its doors and suspend paying dividends to shareholders, shutting down its Australian and New Zealand stores and standing down around 2000 staff, many for four weeks without pay.

It has been a horror week for the $320bn retail sector with closures quickly ratcheting up and tens of thousands of workers sent home. Solomon Lew’s Premier Investments stood down 9000 staff, Michael Hill sent home 2500 employees and Mosaic Brands pulling down the shutters to put in jeopardy its 6800 workers.

Kathmandu, which is listed on the Australian and New Zealand sharemarkets, said it was working across all business operations to pre-emptively manage the situation. It said all of the group’s head offices were closed with staff working from home, in line with government regulation or generally accepted best practice around the world, to minimise the spread of the virus.

All NZ retail stores and distribution centres were closed on March 24 ahead of the lockdown on March 25 and will continue to remain shut for a period of at least four weeks, as mandated by the NZ government. It was in the process of closing its Australian retail network by Friday afternoon.

Kathmandu said other key regions including Brazil, North America and Europe were in a similar situation with stores, wholesale customers and offices closed due to government mandated closures.

Online retail in Australia, Europe and the US continues. In accordance with guidance from the Government, online distribution in NZ has been suspended.

The retailer said it was taking decisive action on cost savings and structural reductions, aided by government contributions and supplements to employee incomes where available.

In Australia, retail store and head office staff with the exception of a skeleton crew will be stood down without pay for four weeks, but with access to government assistance and leave entitlements.

During the lockdown in France, the base of Rip Curl’s European operations, and other European countries, employers are able to temporarily release staff while government pays the majority of employee salaries.

Kathmandu said capital expenditure has been cancelled or deferred. Senior management have agreed a 20 per cent salary reduction until further notice.

“The group is implementing the structural changes necessary to conserve liquidity and streamline the business during this period of unprecedented challenge, while recognising the legal requirements and processes of the many jurisdictions in which it operates,” Kathmandu said.

Kathmandu is also suspending its dividend to preserve cash.

“Like many other companies, the board is reviewing the group’s outlook and capital structure in the light of the COVID-19 situation.

“The board has also taken the prudent decision to suspend dividend payments until after such time as more normal trading conditions resume.”

The retailer has been given a waiver by the NZX to release its interim results a week later than scheduled with its earnings expected to be impacted by the pandemic.

Home furnishings retailer Adairs announced that it will temporarily close all of its 160 Australian stores from close of trade on Sunday. The six Adairs stores in NZ and Mocka’s NZ operations were closed from Tuesday.

“The escalation of the COVID-19 outbreak, together with Australian and New Zealand governments’ requests for everyone to stay at home other than for essential needs, has led to this temporary closure,” Adairs said.

Stores will be closed for an initial four to six weeks.

“We expect that the online channels of both Adairs and Mocka will continue to operate.”

PAS Group, a fashion chain whose outlets include Black Pepper, Review and Yarra Trail, has also decided to close down its portfolio of 225 stores.