Ralph Lauren to forego his entire salary for fiscal year 2021

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