Kolon FnC Executives Return Salaries... Transition to Emergency Management Due to COVID-19

[Asia Economy Reporter Yujin Cho] Kolon Industries FnC Division (hereinafter Kolon FnC) is confirmed to implement a wage return for all executives to reduce costs amid the economic downturn caused by the novel coronavirus infection (COVID-19).

According to related industries on the 18th, Kolon FnC, which has entered emergency management due to COVID-19, will implement a wage return for 27 executives. The wage return rate was set at 10% uniformly across all executive ranks. The executives subject to wage return include 27 people at the director level or higher, including COO Kyooho Lee, who oversees the fashion division, and it applies only to the fashion division excluding the four manufacturing divisions among the five business divisions of Kolon Industries.

A Kolon FnC official said, "From the June salary to December, 10% of the salary will be cut for six months, as a decision to share the pain of executives amid the recent difficult management environment due to COVID-19." To promote the use of annual leave among all employees, the third Friday of each month during the same period will be designated as a company-wide holiday.

Earlier, Samsung C&T Fashion Division also decided to voluntarily return 10-15% of executive wages starting next month and to carry out restructuring by closing the 'Beanpole Sports' brand business, which has deteriorated in profitability. A Samsung C&T Fashion Division official said, "Due to the unprecedented management crisis caused by the COVID-19 situation, we are seeking a business normalization plan as a preemptive response for future survival."

Samsung C&T Fashion Division also plans to implement a four-day workweek temporarily for all employees from July to December and encourage internal leave such as unpaid leave and study leave for those who wish.

Among domestic fashion companies, LF was the most proactive in transitioning to an emergency management system due to COVID-19. Since March, LF has been implementing emergency management measures including a 30% wage return for all executives, including CEO Gyusik Oh. The wage return rate is the highest among fashion companies. An LF official said, "As part of the transition to an emergency management system due to the spread of COVID-19, executives including the CEO are voluntarily returning 30% of their salaries," adding, "The wage return targets are about 30 executives at the senior manager level or higher."

Major domestic fashion companies continue to suffer performance deterioration due to a sharp decline in offline visitors caused by the spread of COVID-19. In the first quarter, Kolon FnC and Samsung C&T Fashion Division posted operating losses of 14 billion KRW and 31 billion KRW respectively, marking a return to losses for major fashion companies. During the same period, LF avoided losses as online sales partially offset offline sluggishness, but recorded an operating profit of 13 billion KRW, down by half compared to 26 billion KRW in the same period last year.

This content was produced with the assistance of AI translation services.