Billionaire retail mogul Solomon Lew has stood down 9,000 staff and declared Premier Investments will not pay rent to landlords during a virus-necessitated shutdown of brands including Smiggle, Peter Alexander, Portmans, and Just Jeans.
Premier on Thursday announced all its retail outlets will close for a month and all Australian employees will be stood down without pay.
It is the latest in a mounting number of retailer shutdowns as a wary public shuns the shops amid tightening government quarantine restrictions.
Trade is still permitted at discretionary retailers and shopping centres remain open for now, but more and more businesses have been forced to act as they feel the pinch.
Doors have been shut, guidance cut, and thousands of jobs slashed in an attempt to secure a long-term future.
Jewellery chain Lovisa and Athlete’s Foot owner Accent Group on Thursday joined Mosaic Brands and Michael Hill Jewellers in temporarily shutting down Australian operations.
More workers will be stood down as a result of impending closures of clothes retailers such as General Pants, Gorman, Tarocash, Conor, Dangerfield, and Princess Highway.
JB Hi-Fi Australia remains open but the firm closed its 14 New Zealand stores, while Super Retail Group also continues to trade strongly – though it has cancelled its interim payout to shareholders.
Economists expect the unemployment rate to surge in the coming months, possibly as high as 11 per cent, as the economy suffers its first recession in nearly 30 years.
Premier Investments said 9,000 people globally will be stood down after it took similar measures in New Zealand, the UK and Ireland.
“This is the hardest decision ever made by Premier – our team are our family and we want to do everything we can to keep them employed, but we believe that it is necessary and the right decision for them, their families, our customers, and the country,” Premier chief executive Mark McInnes said.
The Premier Retail CEO will work from home without pay for the period of the shutdown until April 22.
In addition, the entire Just Group executive team have been stood down and have agreed to work from home when required with either no pay or reduced leave entitlements.
Additionally, Premier intends not to pay any rent globally for the duration of the shutdown.
It cited “extraordinary circumstances”, and the fact that 70 per cent of its Australia and New Zealand stores are already in holdover or have leases expiring in 2020.
Mr Lew – who holds a 43 per cent stake in Premier and also owns private chains such as French Connection and Seed – has long railed against the level of rent charged by landlords.
Premier has already closed 33 stores during the last 12 months and a total of 134 stores closed over the last seven years as it demands landlords adjust rental expectations in line with the performance of their own centres.
Just last week he threatened to close more of his stores stores if mall owners refused to play ball during the COVID-19 outbreak.
It remains to be seen how shopping centre managers such as Scentre, Stockland, GPT, and Vicinity will react to Lew’s strategy and the prospect of other retailers following suit.
Accent, which also owns the Platypus and Hype shoe chains, will close more than 500 retail stores from Friday and stand down a reported 5,000 staff.
Lovisa will also close nearly 400 global stores and cancel its 15 cent interim dividend.
Mosaic Brands – the owner of Noni B, Rivers and Katies – said it will stand down 6,800 employees across 1,300 stores while Michael Hill Jewellers earlier this week announced it would shut 300 stores, including 165 in Australia.
Casino operator Star Entertainment Group stood down most of its workforce this week with 8,100 workers suspended while other hospitality groups including Justin Hemmes’ Merrivale empire and The Federal Group have also suspended thousands of employees.
Virgin Australia on Thursday said more than 1,000 of the 8,000 workers stood down this week will probably be made redundant as the airline grounds planes during the coronavirus pandemic.
Qantas has stood down 20,000 of its 30,000 workforce while virus-ravaged travel firm Flight Centre says an initial 6,000 of sales and support staff globally will either be stood down or made redundant in the company’s latest bid to preserve a future.
Village Cinemas, meanwhile, has successfully partnered with both ALDI and Woolworths to provide temporary casual employment to 2,000 casual and part time team members across Victoria and Tasmania.