As RH enters the fourth week that its galleries, restaurants, and outlets in North America have been closed to help prevent the spread of COVID-19, the retailer has temporarily furloughed approximately 2,300 team members, and permanently reduced its workforce by 440 team members.
Additionally, RH is implementing temporary salary reductions for leaders across the company ranging from 10% for leaders and salaried team members, 20% for directors, 30% for vice presidents, and 40% for senior vice presidents and chief titles. The executive leadership team has chosen to forgo 100% of salaries until business stabilizes.
RH will also significantly reduce capital expenditures and expenses by approximately $130 million and $150 million in fiscal 2020. The capital expenditure reductions are primarily the result of delaying gallery transformation efforts with the exception of RH Marin and RH Charlotte, which will open sometime this spring-summer when state and local governments permit. The $150 million of expense reductions are inclusive of approximately $70 million of compensation savings, assuming galleries, restaurants, and outlets reopen in June, $50 million of advertising savings, and $20 million of savings related to the delay of gallery transformations.
“We believe the seismic shifts in consumer spending that are beginning to take hold, and the new habits being formed as a result of social distancing and sheltering in place, create opportunities for the RH brand to play an even more important role in the lives of consumers who are making their homes the center of everything they do,” said Gary Friedman, RH chairman and CEO.