Primark bosses have taken a 50 per cent pay cut and cancelled bonuses after warning of a huge slump in 2020 profit due to coronavirus.
Chief executive Paul Marchant’s base pay will be halved temporarily. George Weston and John Bason, CEO and chief financial officer of Primark owner Associated British Foods (ABF), will also take a 50 per cent cut.
Executive directors will not receive bonuses for the current financial year, while ABF chairman Michael McLintock and board non-exec directors have cut their fees by 25 per cent.
Alongside other high street retailers, Primark has shut all its stores in the UK to comply with the government’s coronavirus lockdown.
While Primark is continuing to pay staff for at least two weeks, it has refused to pay rent on its 110 commercial properties.
It hopes to force landlords to consider revising rent terms during the coronavirus crisis.
ABF has warned that shutting Primark’s stores will cost it £650m a month in lost sales.
However, it hopes to recover around half of total operating costs to offset that loss somewhat.
Primark cancels swathe of orders
Primark has also had to cancel huge orders from Bangladesh, in a massive blow to workers there. Collectively, retailers including Primark and Edinburgh Woollen Mill have cancelled £1.4bn in orders from Bangladesh.
And they have suspended another £1bn in orders, according to the Bangladeshi and Garment Exporters Association.
Today ABF said: “The board, including the executive management team, believes that these steps are appropriate given its expectation that full year earnings will now be much lower than envisaged at the start of the financial year.
“The board is acutely aware that many Primark employees will see their livelihoods affected by Covid-19.”
So far Primark has not announced plans to furlough workers on the government’s job retention scheme. That would see 80 per cent of staff’s wages paid by the government.
Around a third of UK businesses are set to furlough 75 per cent of workers, according to a study. And retailers including Gap have taken the measure to protect staff wages.