Saudi Clothing Retailer Alhokair Cuts Staff Pay
(Bloomberg) --
Saudi clothing retailer Fawaz Abdulaziz Alhokair Co. cut staff wages and is considering further measures that may impact its stores and headcount to navigate the impact of the coronavirus.
“Alhokair has temporarily implemented additional company-wide salary reductions,” it said in a statement. “Additional measures are being considered that may have an impact on the company's existing store network and headcount should Covid-related challenges continue.”
Like countries across the world, Saudi Arabia locked down its cities and shut businesses to avoid the spread of the virus. It impacted retailers like Fawaz Alhokair, which reported a full-year loss of 681 million riyals ($182 million) after a profit year ago.
Fawaz Alhokair, which owns the franchise for brands like Banana Republic and Zara, attributed the loss to portfolio optimization strategy, closure of non-performing stores and disposal of weak brands. The company has restarted operations as the kingdom eased restrictions on businesses.
The shares dropped as much as 8.5% on Wednesday, taking its loss for the the year to 30%.
Alhokair also said:
- “We have significantly cut operating expenses and are continuously streamlining our supply chain process by strengthening of our supplier relationships and with investments in technology,” CEO Marwan Moukarzel
- “Current market circumstances have spurred us to expedite the rollout of several new online platforms”
- “Alhokair remains fully committed to its strategic objective of allocating a growing share of its portfolio to experiential and lifestyle brands”
Secured rent relief agreements with its landlords, waivers on contractual base rent and service charges for a set period
- Continues discussions with landlords on rent
- Link to statement
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