The Covid-19 crisis of 2020 is both unprecedented and rapidly changing, when it’s all said and done it will be referred to in stories and textbooks for generations to come.
Businesses small and large are scrambling to secure their cash flow and get their heads around the Government’s relief package but are they losing sight of the bigger long-term picture?
This is arguably the first major earth-moving experience (both literally and figuratively) of the social media era. Stories of decisions taken by business leaders are being shared and criticised in real-time, but will these actions affect their brands in the years to come? There are a few notable brands that have chastised and some that have been praised for their handling of the crisis.
Mike Ashley and the Frasers Group
Shortly after the Prime Minister announced the lockdown due to the Covid-19 pandemic, a letter signed by Frasers Group CFO Chris Wootton said that the business was “uniquely well placed to help keep the UK as fit and healthy as possible during this crisis.” The move was slated by politicians and on social media with the blame being placed almost squarely on Group founder and CEO Mike Ashley.
The furious backlash led to the Group closing all stores and drew a public apology from the Chief Executive himself. In the statement, Ashley said he was “deeply apologetic” and offered use of the company’s truck fleet to the NHS for the delivery of supplies. This isn’t the only hit Ashley took during the Covid-19 pandemic. Newcastle United, which is also owned by the businessman, was the first Premier League club to put all non-first-team staff on furlough leave.
Daniel Levy and Tottenham Hotspurs
Tottenham joined Newcastle in announcing that they had asked 550 non-playing employees to take a pay cut of 20% “utilising, where appropriate, the Government’s furlough scheme.” Spurs aren’t the only football club to take this measure, joining Barcelona, Bayern Munich and Juventus in trying to shed costs. Critics of the move were quick to point out that Club Chairman Daniel Levy is reportedly the highest-earning executive in the Premier League.
Despite taking the pay cut himself as a non-playing employee, Club accounts show that Levy was given a £3m bonus for completion of Tottenham’s new stadium. The move comes weeks after several NBA players, including Kevin Love of the Cleveland Cavaliers and Rudy Gobert of the Utah Jazz, announced that they would be donating large sums of money to cover lost wages of arena workers who have been forced to stay home due to the virus.
Celebrity chef and restauranteur Rick Stein said he won’t pay his staff’s wages while his restaurants remain closed. Stein, who spearheads a culinary empire reportedly worth over £30 million, was criticised in the press and social media for not stepping in to pay staff salaries whilst they wait to reclaim 80% of staff wages under the government’s Coronavirus Retention Scheme. Ian Fitzgerald, the Managing Director at Rick Stein Group, commented on the controversy saying, “if we honour staff salaries in the meantime the company may have to close permanently and that won’t benefit anyone.”
“We are working day and night with our insurers and bankers to look at solutions to pay staff the hours we would have expected them to have worked had we been open, in the hope that we can fund these payments before the grants would be paid.” The Rick Stein Group was recently named one of the 100 best companies to work for by the Sunday Times.
Tim Martin and Wetherspoons
Never one to shy away from the spotlight, Wetherspoon Chairman Tim Martin hit the headlines vowing to keep all of the Wetherspoons branches open and stating “my instinct is that closure won’t save lives but will cost thousands of jobs and create unsustainable costs for the UK.” A week later, he was loudly scolded for encouraging his 40,000 staff to take up jobs at supermarkets while the pubs remain closed, despite an annual turnover of £1.8b.
An online petition demanding that Wetherspoon employees receive full pay during the crisis garnered almost 15,000 signatures, including that of 95 MPs. Martin then announced that all workers would receive up to 80% of their wages while the company’s bars remain closed.
Richard Branson and Virgin Atlantic
Before the Government announced their economic relief plans, Sir Richard Branson was widely criticised for asking Virgin Atlantic staff to take eight weeks unpaid leave as the virus continued to spread. With an estimated net worth of £4.5b, social media sleuths were quick to point out that the billionaire has more than enough money in the bank to foot the bill for the 8,500 employees on the airline’s books.
Weeks later, and following the relief package announcement from the Chancellor, Branson pledged £215m to protect jobs across the Virgin Group. While acknowledging the “chances of securing widespread economic recovery will depend critically upon governments around the world,” the entrepreneur’s cash injection would go a long way to protecting jobs during the fallout of the crisis. Branson has developed a good reputation over the years for his charity work, including several projects in South Africa.
So, what will the history books say about the business leaders that guided their companies through this turbulent period? Only time will tell.