Foot Locker’s coronavirus furlough to hit 'majority' of store employees

Fox Business Briefs: Furloughs hit the Walt Disney Company as more than 100,000 employees will stop being paid this week; Wynn Resorts CEO Matt Maddox lays out his plan to reopen the Las Vegas Strip by the end of May.

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Shoe giant Foot Locker is the latest retailer to furlough its employees over coronavirus-related store closures. The “majority of the Company’s store employees in the United States and Canada” will be affected, according to paperwork filed with the Securities and Exchange Commission.

Additionally, the furlough will extend to store employees in Australia and supply chain employees in the U.S.

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Ticker	Security	Last	Change	Change %
FL	FOOT LOCKER INC.	22.86	+0.62	+2.79%

The furlough will begin April 26 – a full week after large companies such as Disney, Best Buy, Ikea and CarMax began companywide furloughs.

Foot Locker’s furloughed employees will receive their wages and salaries “as applicable” until the set date. Once the furlough begins, impacted employees will become eligible for unemployment benefits, which is subject to local regulations.

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However, health care and other benefits will be provided to workers who are currently enrolled in plans.

So far, there is no end date for Foot Locker’s furlough.

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"The Company’s retail store closures and employee furlough period is uncertain at this time and will continue until operations can safely and responsibly resume in accordance with national, state, and local guidance related to the evolving COVID-19 pandemic,” according to the SEC filing.

Foot Locker executives will undergo salary reductions starting May 3. The company’s CEO, Dick Johnson, is having his salary reduced by 40 percent while the executive and senior presidents are having their salary reduced by 20 percent and corporate vice presidents and general managers will have their salary reduced by 10 percent.

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Moreover, Foot Locker’s board of directors has suspended “cash elements of their director compensation until further notice.”

Foot Locker is temporarily suspending its share repurchase program and is reducing capital expenditures by 50 percent for the fiscal year ending on Jan. 30, 2021, which is all meant to increase the company’s cash position and provide additional flexibility in light of lost sales from the coronavirus.

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