Georgia-based furniture store chain Havertys announced it will furlough workers, freeze matching of employees 401(k) contributions and cut senior executive salaries as it and many other retailers wrestle with the coronavirus pandemic.
The 135-year-old company, which is led by a great-grandson of the chain’s founder, said Wednesday that it will furlough virtually all of its store and distribution workers, most of its warehouse staff and corporate office personnel to “a minimum level for necessary operations.”
The company has 120 showrooms in 16 states. It earlier announced that it was shutting its stores through April 2 and would continue paying affected workers during that period. Now, it says it is extending the suspension of its operations through April 30 and furloughing employees. Staffers will “continue to receive enrolled health benefits while on furlough, with Havertys covering 100% of the premiums through this announced period of closure,” Havertys said in a news release.
In an interview with The Atlanta Journal-Constitution late last year, chief executive officer Clarence Smith cited the company's history of surviving tough times, including wars, recessions and the Great Depression. While sales had been down much of last year, Havertys remained profitable, with essentially no debt. But as the pandemic took tighter hold in the United States, Havertys recently initiated borrowings from a credit facility, describing the action "as a precautionary measure in order to increase its cash position and preserve financial flexibility."
Havertys said Smith would take a 40% salary cut and there would be salary reductions for other officers and managers not furloughed. The company also is canceling and deferring most orders for inventory.
Smith said in a statement that “the decision to furlough our valuable and loyal teammates was extremely difficult to make.”
“The economic effect of this health emergency has had a sudden and severe impact on our business,” he added. “The actions we are taking must be done to help reduce risk and allow Havertys to reopen its stores, when appropriate, and return to providing work for our teammates and vendors.”
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