Dive Brief:

• Designer Brands on Wednesday instituted a temporary leave of absence for over 80% of its workforce that will take effect March 29, according to a Securities and Exchange Commission filing. Those employees will not receive pay, but will continue to be able to access benefits. 

• The employees who aren’t furloughed will have their pay reduced, including a 20% base salary cut for executive officers. 

• “For now, we must pivot to operating as a dot-com-only business,” Designer Brands CEO Roger Rawlins wrote in a statement. Designer Brands is the parent company of Designer Shoe Warehouse, The Shoe Company and Shoe Warehouse, among other brands. 

Dive Insight:

Designer Brands, which previously closed stores to the public beginning March 17, announced that locations will remain closed “until further notice” as the retail industry temporarily shutters doors to stop the spread of COVID-19. Instead, the corporation is leaning into e-commerce with plans to continue to operate distribution and IT centers. 

“We are an e-commerce retailer with the reach of 700 fulfillment points and multiple websites to serve our customers across North America,” Rawlins noted. 

The sudden pivot, though, has been a heavy blow to the company’s workforce, leaving most employees temporarily without income. Retail is one of many industries hit hard by the ripple effects of the pandemic, contributing to over 3 million workers that have applied for unemployment benefits in the last week, according to The Wall Street Journal. 

In response, a number of companies have reduced pay across the board and some executives are forgoing compensation during the pandemic. Both Dick’s Sporting Goods’ CEO and its president announced that, effective March 29, they will not receive a salary, while the retailer’s CFO will take a 50% salary reduction. Sally Beauty’s CEO and board of directors have agreed to a 50% pay reduction “for the duration of the COVID-19 crisis,” and Macy’s CEO Jeff Gennette stated that he will not take compensation during the crisis. 

Also this week, Pier 1 announced a furlough program for nearly 65% of its home office staff, and some store and distribution associates. The retailer also cut compensation by 20% for remaining employees “who are critical to ensuring business continuity and a seamless customer experience on Pier1.com,” according to the company. Corporate executives are also taking salary reductions. 

Designer Brands can be found in nearly 940 locations in North America, which include its own DSW, Shoe Company and Shoe Warehouse locations plus leased departments at retailers including Stein Mart.