Dive Brief:

• Build-A-Bear Workshop on Thursday announced furloughs for over 90% of its workforce, effective March 29. Those employees won't receive direct compensation but will continue to get employee benefits, including medical, dental and vision coverage, according to a filing with the Securities and Exchange Commission.

• The same day, the company is reducing pay for "nearly all" the employees not on furlough, per the filing. Base salaries for executive officers will be cut 20%. Annual cash retainers for non-employee board members will be eliminated for the first quarter.

• Build-A-Bear also says it "has not yet determined when some or all of these stores may reopen." While directing customers to go online, the retailer in its filing said deliveries "are expected to be delayed," as it has closed its Ohio warehouse to review its processes around "workplace safety, including social distancing and sanitation practices recommended by the Centers for Disease Control and Prevention."

Dive Insight:

In announcing temporary store closures in the U.S., Canada, the U.K., Denmark and Ireland through April 2, Build-A-Bear previously said employees would still be paid. Now, however, the company isn't sure how temporary some of those closures will be.

While analysts aren't expecting e-commerce to save retail entirely from the profound implications of pandemic-related store closures, digital sales will help to some degree. The trouble for Build-A-Bear is that its brand depends on in-person visits, where children put together their own toys, which doesn't translate too well online.

In fact, declining mall traffic has led the retailer in recent years to seek other places to establish that in-store experience, including as shop-in-shops at Walmart locations, Bass Pro Shops and its experiential Cabela's outdoor retail stores and FAO Schwarz, and through a partnership with indoor water park chain Great Wolf Lodge.

The company's forced pivot to more e-commerce is also complicated by the realities of the COVID-19 pandemic, which is hobbling distribution and warehousing for the same reasons retailers have shuttered store doors. At a time when many parents may be in need of new experiences for children home from school, Build-A-Bear is warning customers that online orders could be delayed two to four weeks.

The retailer is now unsure about how many stores it will ever re-open, as it takes drastic steps to protect its operations. For now, according to a letter posted by CEO Sharon Price John, it's taking its cues from health officials. "Our decisions, including those related to store operations, will continue to be guided by experts including the Centers for Disease Control (CDC), World Health Organization (WHO) and other government agencies and we look forward to seeing you when our stores are able to reopen," she said.