Israeli retail fashion chain Fox Group announced on Sunday that it has decided to furlough 30% to 50% of its staff across the country because of the economic repercussions of the ongoing war with the Hamas terror group.
Up to half of the fashion group’s employees, mainly those working in the retail chain’s shops and stores, will be put on unpaid leave for a period of 30 days, Fox said in a filing to the Tel Aviv Stock Exchange. Employees working in the group’s headquarters who are not furloughed will be paid 80% of their salary.
Following the announcement, the group’s shares on the Tel Aviv Stock Exchange fell more than 4% in early afternoon trading.
After Israel declared war on Hamas — which in a shock onslaught sent 2,500 terrorists to break through the fortified Gaza barrier on October 7 and rampage through border communities, killing some 1,400 people, mostly civilians — the scope of the retail chain’s business activity has been significantly reduced, the group said.
Fox said that some of its stores, mainly located in shopping centers, remain open in accordance with the directives of the Home Front Command, but they are dependent on customer traffic, which is relatively low as shoppers have been staying away.
“In the shadow of the great uncertainty surrounding the duration and magnitude of the war, the group has started to take steps aimed at cutting expenses and reducing the economic damage in this challenging period to enable a return to regular activity in Israel when the time comes,” Fox said in a statement.
The group also warned of a “substantial negative impact” on its results in the fourth quarter of the year.
“The extent of the impact, like other affected groups, cannot be estimated,” Fox said.
In addition, Harel Wizel, CEO and owner of the Fox Group, along with other senior executives including the board chairman, agreed to cut their salary to 50% for a period of 30 days.
Fox, a family-owned business known for its inexpensive T-shirts and sweatshirts emblazoned with the all-capital FOX name brand, has become Israel’s largest fashion group, bringing an assortment of international brands to the Israeli shopper. The retailer, which has more than 10,000 employees, operates over 1,000 stores in Israel, Europe, and Canada, including the Israeli franchise for Nike and Foot Locker (through its subsidiary Retailers) for other brands such as American Eagle, Billabong, and Mango.