COVID-19 Impact: DSW, Nordstrom, B8ta, Ascena And Build-A-Bear Furlough Employees

More retailers trying to cut costs amid the coronavirus (COVID-19) outbreak are putting employees on furlough — and not just store employees. DSW parent Designer Brands, Nordstrom, b8ta, Ascena Retail and Build-A-Bear are among retailers that have recently placed workers on a temporary leave of absence.

Designer Brands is placing 80% of its workforce on unpaid leave effective March 29, it revealed in an SEC filing. While on furlough, employees will continue to receive benefits including medical, dental and prescriptions. The company is reducing pay for nearly all employees not placed on leave. Base pay for executive officers will be cut by 20% and cash compensation for non-employee board directors on its board will be cut 20%.

As of March 2019, Designer Brands employed 16,100 people. The company has given no timeline as to how long the furlough will last.

Nordstrom revealed that it is extending store closures in the U.S. and Canada until April 5, and will furlough a “portion” of corporate employees for six weeks beyond that date. The moves come after the department store said it was reducing more than $500 million in operating expenses, capital expenditures and working capital.


“This is the most difficult decision we have made in our company’s long history,” said CEO Erik Nordstrom. Both Erik and President Peter Nordstrom will not take salaries from April to September, and the executive leadership group will forgo a part of their salaries as well. In addition, all members of the company’s board will not take cash compensation for a six-month period.

Ascena Retail, which operates Ann Taylor, LOFT, Lane Bryant, Catherines and Justice, is furloughing all store associates until it can reopen its 2,800 stores. Full-time associates will continue to receive medical benefits.

Build-A-Bear will place more than 90% of workers on unpaid leave effective March 29. The furloughed employees will receive medical, dental and vision benefits, and most workers who aren’t furloughed will see a pay cut. Base pay for all executive officers will be cut by 20% and annual cash compensation for non-employee board directors is eliminated for Q1 2020. Additionally, the retailer’s Ohio warehouse is closed until completion of a review of workplace safety measures, which could potentially delay online orders.

Unlike the other four retailers, b8ta not only furloughed approximately 250 retail employees, it laid off nearly half its corporate employees. Remaining employees will receive pay cuts.

B8ta previously guaranteed pay from March 15-28 and is adding a one-time relief check of $1,000 for remaining full-time employees and $500 for part-time employees.

The moves come amid a major week for retail furloughs, which already saw Pier 1 Imports put 65% of its headquarters staff on unpaid leave, and Tailored Brands furlough all U.S. store employees and a “significant portion” of distribution network and office workers.

Meanwhile, H&M has discussed temporary layoffs of tens of thousands of employees in all parts of the business, as well a potentially permanent layoffs for a smaller number of employees. COVID-19 has hit not just retail, but many other business sectors hard when it comes to employment. Nearly 3.3 million Americans filed jobless claims on a seasonally adjusted basis last week — the highest number in U.S. history.

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