The Warehouse Group executive team will take a 20 per cent salary cut until the end of June in light of the Government’s business criteria for New Zealand’s level 3 lockdown.
A 10 to 20 per cent reduction is also on the cards for employees earning over $60,000, though those earning under this amount are not set to see their pay cut.
According to the business, the criteria announced made it clear that The Warehouse Group would not be up and running as usual until at least Stage 2, and that further measures need to be taken to lessen operational costs.
“Unfortunately, there is such uncertainty around when normal business can resume, it is imperative that such measures are taken immediately,” The Warehouse Group chief executive Nick Grayston said.
“Our focus to date has very much been about keeping our employees and customers safe. Safety measures were implemented early and upon confirmation of lockdown at alert level 4 for four weeks, we confirmed employees would receive their normal pay for the four weeks.
“However, we are now at a new stage of the pandemic where the horizon remains unclear around short and mid-term customer shopping habits and the ability to operate bricks and mortar stores.”
Grayston admits the group had put off taking this action until now, but that now needs to act to preserve the business for the long term.
The business also asked for patience from customers, shareholders and suppliers as it realigns its priorities in light of the evolving situation it trades within.
In March, The Warehouse Group reported a net profit drop of 20 per cent during the first half of FY20 – largely impacted by transformation costs.
Retail sales across the group, which includes The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 Group, and TheMarket, rose 2.6 per cent to $1.68 billion.