Harrods CEO informs staff it will not issue bonuses for 2020
Harrods CEO Michael Ward has confirmed to staff that the company will not issue any bonuses for 2020, even if non-financial bonus targets are met.
The news was announced to staff last week as the department store reopened its doors alongside the rest of retail in England.
Ward confirmed that he had been hopeful earlier in the year that the business would see strong enough recovery to support making bonus payments.
In the letter seen by TheIndustry.fashion, Ward writes: "It has been a strange and eventful year; I must confess to being pleased that we are nearing the end of 2020. The global pandemic is unfortunately still prevalent and continues to impact our ability to trade.
"As a business, whilst we have responded well and introduced new initiatives, it will still take a notable improvement in external conditions for us to recover and return to the trading levels we enjoyed pre-COVID.
"Throughout the year we have had to make incredibly tough decisions to protect our business and try and create strong foundations for our future. This week we made the very difficult decision that due to the highly exceptional circumstances we are in, we will not be paying any bonus for 2020.
"Whilst the majority of bonuses will not have been payable due to business performance, we want to be clear and confirm that, even where bonus criteria are linked to non-financial targets, there will be no payments this year to anyone, including myself and our Directors.
"This is not a decision that we have taken lightly and we understand this will be disappointing, if perhaps not surprising, news for all. We had been hopeful earlier in the year that we might see a strong enough recovery by this time to support making bonus payments, but given the length of the first lockdown, this unforeseen second lockdown, the continued restrictions on international travel as well as other factors including the still unresolved Brexit discussions, it is clear that our financial position will not have recovered sufficiently, and our priority has to be to protect as many jobs as possible following the most challenging trading period in our history.
"We hope you can understand this is the right thing to do for us all and to support the business to create the best possible foundations for 2021."
TheIndustry.fashion has contacted Harrods for comment.
To shift unsold goods after the first lockdown, Harrods opened an outlet store on a short-term lease at the Westfield London. In July the company announced 700 redundancies, equating to about 14% of its workforce.
In September, Harrods opened its very first stand-alone beauty concept store, H beauty.