Bosses at Primark have asked for a temporary 50% pay cut, as the UK’s retailers battle to survive the unprecedented coronavirus lockdown.
With retailers enduring their worst month on record in March and non-essential shops now forced to remain shut, Primark closed its 189 UK shops in late March. A further187 shops elsewhere in Europe and in the US had already been closed.
Primark’s parent company told investors on Friday its full-year earnings would be “much lower than expected.”
“The board is acutely aware that many Primark employees will see their livelihoods affected by COVID-19,” said owner Associated British Foods (ABF.L).
It announced both the chief executive of Associated British Foods George Weston and Primark chief executive Paul Marchant had requested “that their base pay be reduced temporarily by 50%.” The board agreed, with ABF finance director John Bason also requesting a pay cut.
Non-executive directors of the ABF board, including chair Michael McLintock, “have decided that their fees should be reduced temporarily by 25%.”
With Primark’s income taking an enormous hit, the company said it had a strong balance sheet with around £1.7bn ($2.1bn) in cash.
It also said it had not seen a material impact on other key arms of the business, including sugar, grocery, ingredients and agriculture.
It comes as new figures show Britain’s high street retailers endured their worst month on record in March, both in stores and overall including online retail.
Data from accountancy and business advisory firm BDO showed total like-for-like sales dropped -17.9% in the past month.
In-store like-for-like sales plummeted a record –34.1% in the past month compared with a year earlier.
“Reduced footfall due to social distancing and isolation, diverted demand from discretionary to essential items, and enforced store closures in the final week of March all contributed to the worst results on record for total in-store like-for-like sales,” said BDO’s high street tracker report.