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Frasers Group reviews furlough payments

Mike Ashley’s Frasers Group, formerly known as Sports Direct International, has decided to keep salary levels at 100% in May for the majority of its employees. 

Almost all of the group’s employees, comprising Sports Direct, House of Fraser, Flannels, Jack Wills and Lillywhites, have been furloughed under the coronavirus job retention scheme.

The company has around 29,400 staff across six business segments: UK sports retail, premium lifestyle, HoF retail, European sports retail, rest of world retail, and wholesale and licensing.

The group had initially assisted with the furlough payments, to guarantee 100% of employees’ full wages to the 30 of April 2020, above the 80% provided by the government’s furlough scheme.

Staff were then told that from and including 1 May 2020, employees’ will be paid 90% of their basic salary, with the additional 10% being paid by Frasers Group, the letter seen by Drapers indicates. 

However, the company has decided payments to virtually all directly engaged employees, including those on casual contracts, will remain at 100% of normal salary levels for May. This applies to both furloughed and non-furloughed employees.

Senior management including chief financial officer Chris Wootton, head of commercial Sean Nevitt,  and the non-executive directors, will remain on a reduced annual salary capped at £40,000 at this time. As per normal, Ashley will not be drawing a salary. 

Ashley said in a letter to staff sent: “At the end of last month, we wrote to you and requested that all Frasers Group employees make personal sacrifices with regards to their pay, following those sacrifices already made by senior management within the group. This request was not made lightly. However, at the time and given the unprecedented uncertainty facing the business, we felt it was the only sensible course so that senior management could evaluate the crisis and trading conditions and take steps to ensure the Frasers Group could continue as a viable business.

“I want to thank all of those who committed to the revised salary. We find ourselves in exceptionally difficult times, and we know that this sacrifice was not an easy choice to make. Although the retail landscape remains uncertain, we now find ourselves with a little more clarity. The Sunday before last, the government announced their plans to restart the economy, including their proposal for the phased re-opening of retail stores. Although not guaranteed, it appears we may be able to begin opening our stores from 1 June 2020. If this is the case, we will be prepared for all social distancing and safety guidelines laid out by the government.” 

He added: “Further to this, our online offering for our sporting goods, fitness equipment and other products has continued trading during this lockdown. Thanks to the incredibly hard work of the warehouse and logistics team, and the diligence of our health and safety team, we have dealt with the demand and remained open and operational throughout.

“It is, therefore, with much pleasure and relief that I write to you today, to inform all direct Frasers Group employees that we will not implement any salary reductions for May. Our people will receive their full expected salaries, as they did in April. This applies to both furloughed and non-furloughed employees. We’re very proud to be one of the only retailers to pay everyone 100% of their salary during this period.

“Many individuals within the Frasers Family have gone above and beyond during this period, enabling us to keep trading and generating revenue for the group. These endeavours will not go unnoticed. The Frasers Group is nothing without its people, and I thank you all for your continued support and hard work.”

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