Havertys details Q2 COVID-19 cost-cutting measures

ATLANTA – Havertys, which took a number of actions in its first quarter to respond to the COVID-19 pandemic, took several additional steps in its second quarter.

When it released its first quarter earnings, Havertys detailed those additional actions, which included salary reductions beginning in April that called for a 40% cut for the CEO and tiered reductions for officers and managers and the suspension of directors’ cash retainer fees.

The company also furloughed 3,033 team members in a total workforce of 3,495 on April 1 for 30 days. That included virtually all store and distribution personnel, a majority of the warehouse staff, and all but the minimum level of corporate personnel necessary for operations. The monthly wages associated with furloughed personnel are approximately $9.9 million. Havertys paid enrolled health benefits of furloughed team members, the company said.

Havertys also froze its company 401(k) contribution, reduced or cancelled certain purchase orders, and extended certain vendor payment terms.

It also worked with landlords to defer rent payments, and eliminated non-essential capital expenditures.

On April 27, it reduced its total workforce by approximately 1,200 team members effective April 30 and extended the furlough of 730 team members for another 30 days. The annualized total compensation costs associated with the permanent reduction in workforce is approximately $42.6 million, the company said.

 

Source: Furnituretoday