LVMH and Kering Reportedly Backpedal After Putting Workers on Government Assistance
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Two of the world’s largest luxury conglomerates have reportedly backpedaled after allegedly telling workers they would be placed on emergency government assistance amid the coronavirus pandemic.
According to internal documents obtained by the Financial Times, LVMH and Kering reneged on their decision to put some employees on the government’s partial unemployment scheme after smaller fashion houses Hermès and Chanel announced that they would cope without state support. The government’s program allows companies to shorten hours or furlough workers while the state finances a portion of salaries to prevent widespread layoffs.
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Shortly after France entered its lockdown in mid-March, LVMH reportedly put some employees at flagship brand Louis Vuitton and beauty retailer Sephora on government assistance. However, it reportedly retracted that decision last week. It is unclear what LVMH and Kering are doing alternatively with their workforce after reversing the decision to use government assistance.
At Gucci parent Kering, the Financial Times added that accessories brand Boucheron had suggested in recent weeks that it would also put employees on partial unemployment. That plan was said to have been abandoned on Monday.
Other international companies — including German sportswear giant Adidas, for example — have been criticized for taking advantage of legislation intended to help workers and businesses that face financial hardship. Critics have suggested financially stable firms and their highly compensated leaders should be conservative in their use of government assistance. Those issues have been exacerbated as thousands of retail workers in various countries fill unemployment lines after receiving early promises that they’d be compensated despite temporary store closures. While many firms kept those promises for an initial two weeks, government social distancing guidelines have extended longer, leading many retailers to resort to furloughs.
Meanwhile, amid widespread layoffs and challenges around the handling of employee time off and other compensation, headlines have called attention to the vast wealth of global CEOs, including Amazon founder Jeff Bezos, who took heat after appearing to suggest that the public donate to help fund the e-commerce giant’s contract employees. According to Bloomberg‘s ranking of billionaires, LVMH CEO Bernard Arnault and Kering CEO François-Henri Pinault are France’s richest and third-richest men, respectively. Arnault’s net worth is equivalent to $72 billion, while Pinault’s is closer to $32.9 billion.
Both executives, as well as Amazon’s Bezos, have contributed financial and other resources to help medical professionals in the fight against COVID-19, which has sickened more than 1.4 million people in the world and killed at least 80,700 others.
Just over two weeks ago, LVMH ordered 40 million masks from a Chinese supplier to aid French health professionals, on top of producing hand sanitizer for hospitals across the country.
Separately, Kering has imported 3 million surgical masks from China and delivered them to workers on the front lines. Its Balenciaga and Yves Saint Laurent brands have also offered up their workshops to manufacture masks.
LVMH and Kering did not immediately respond to FN’s request for comment.
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