Abercrombie & Fitch extends closure of non-APAC stores, borrows from credit
Mar 27, 2020
Abercrombie & Fitch Co. has extended the temporary closure of its stores outside of the APAC (Asia-Pacific) region until further notice, and has taken action to boost its financial flexibility.
The company said it will continue to follow the guidance of local governments and health organizations to determine when it can reopen its stores across North America and the EMEA region, which were first closed earlier this month.
Its APAC region stores across all its brands, including Abercrombie & Fitch, Abercrombie Kids and Hollister Co., are now open, and its online stores remain open in all regions.
As of February 1, 2020, Abercrombie & Fitch had $671 million in cash and cash equivalents. To boost its liquidity, the company initiated the process to borrow $210 million under its senior secured asset-based revolving credit facility on March 25. In addition, last week the company withdrew the majority of excess funds from its Rabbi Trust, providing it with approximately $50 million of additional cash.
“We entered this period of unprecedented uncertainty with a healthy liquidity position and are taking immediate, aggressive and prudent actions, including reevaluating all expenditures to enhance our ability to meet the business’ short-term liquidity needs, in order to best position the company for our key stakeholders, including our associates, customers and shareholders," said Fran Horowitz, chief executive officer.
"We are partnering with our vendors, landlords, and lenders to preserve liquidity and mitigate risk during the Covid-19 outbreak.”
The company said it will also not undertake any share buybacks for the foreseeable future.
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