July 1, 2020 / 8:01 AM / 9 days ago

Saudi retailer Alhokair to cut staff pay after full-year loss

DUBAI, July 1 (Reuters) - Saudi Arabian retailer Fawaz Abdulaziz Alhokair Co. (Alhokair) said on Wednesday it had reduced salaries temporarily and was considering other measures that could affect its store network and employee numbers.

The company, which has franchise rights of brands including Banana Republic, Gap and Mango, reported a full-year loss of 681.2 million riyals ($181.62 million) compared with a 138.1 million riyals profit a year earlier.

Alhokair said the loss was due to the coronavirus pandemic which forced the company to temporarily shut most of its retail outlets in Saudi Arabia. It also operates elsewhere in the Middle East and North Africa, Central Asia and the Caucasus.

“While Covid-19 is taking a toll on the company’s financial performance in the short-term, management is confident in Alhokair’s ability to weather the challenges,” Chief Executive Marwan Moukarzel said in the company’s results statement.

The retailer did not say how much it had cut wages by or for how long but said it had significantly cut operating expenses. Alhokair also said it was able to cover 60% of salaries of 70% of its staff through a government unemployment insurance programme for Saudi employees.

The group has secured rent relief from most of its landlords and continues to discuss with them other ways to reduce its expenses, it said.

Saudi Arabia last month lifted many coronavirus-related restrictions on movement and businesses, including ending a nationwide curfew, that had been in enforced for several months. ($1 = 3.7506 riyals) (Reporting by Alexander Cornwell. Editing by Jane Merriman)

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