Crocs, G-III and Ascena announce further measures to deal with coronavirus crisis
Extended store closures, furlough programs and base salary reductions are just some of the measures announced by U.S.-based fashion retailers such as Crocs, Ascena and G-III since the start of the week, as they try to keep afloat during the ongoing Covid-19 pandemic.
On Monday, the owner of brands including Ann Taylor, Lane Bryant and Justice announced that it will not only be extending its temporary store closures for the foreseeable future, but will also be implementing a furlough program affecting all retail associates and around half of its corporate employees.
All corporate associates earning salaries over a certain amount will also be subject to a temporary reduction in their base salaries of between 10% and 45%, starting this week. The base salaries of the company’s CEO, Gary Muto, and interim executive chair, Carrie W. Teffner, will be temporarily cut by 50%.
On top of this, Ascena is implementing measures to reduce costs, capital expenditures and inventory commitments, while also reassessing vendor payment terms.
The Mahwah, New Jersey-based company’s distribution centers remain open in order to support continued e-commerce operations. The facilities are, however, working at limited capacity and have introduced measures such as staggered shifts, increased cleaning, and the separation of workstations by at least six feet.
The Minneapolis-based womenswear retailer announced on Tuesday that it is extending its previously announced temporary store closures “until governing officials indicate it is safe to reopen,” stating that corporate employees will also continue to work from home until further notice.
The company’s distribution center is still in operation, albeit at limited capacity, and has implemented reinforced sanitation and social distancing practices in accordance with guidelines from the Centers for Disease Control and Prevention.
In an effort to conserve capital during the ongoing disruptions, the retailer also announced the introduction of furloughs for all store associates and 60% of its other workers, while corporate employees will receive a temporary base salary reduction. Starting at around 20%, this reduction will be up to 50% for the company’s CEO, Keri Jones.
Furthermore, Christopher & Banks is suspending approximately $3 million in planned capital expenditure, taking steps to significantly reduce its operating expenses, and negotiating with its vendor partners and landlords.
The opinion-dividing plastic clog maker has announced the extension of its temporary store closures in North America and many parts of Europe until further notice.
The company has withdrawn its previously reported first-quarter financial guidance and amended its revolving credit facility with PNC Bank, National Association and a consortium of other lenders. The credit facility was increased from $450 million to $500 million and now has a modified leverage ratio of 4.00x for the second and third quarters of fiscal 2020, decreasing to 3.50x in Q4 2021 and 3.25x after that.
Further measures being adopted by the Niwot, Colorado-based footwear manufacturer include the suspension of share repurchases in order to preserve maximum liquidity and flexibility.
Nonetheless, in a release published on Monday, Crocs president and CEO Andrew Rees adopted a reassuring tone, claiming, “We are confident that these actions will ensure we are in a good position to manage through this crisis and will emerge a strong, vibrant brand.”
G-III Apparel Group, which owns the likes of DKNY, Donna Karan and Vilebrequin, reported on Tuesday that it will be reducing the number of its retail segment employees by more than 80% through furloughs and staff reductions.
Around 60% of employees working in the company’s wholesale segment will also be furloughed effective April 6, as the business responds to reduced demand by focusing on a smaller workforce necessary for critical activities.
Effective March 30, the base annual salaries of senior personnel will be temporarily reduced by between 10% and 40%, with executives in top management roles, such as COO Wayne S. Miller, CFO Neal S. Nackman, and EVP and board member Jeffrey Goldfarb, having voluntarily agreed to a temporary salary cut of 40%.
G-III CEO and chairman Morris Goldfarb, as well as president and vice chairman of the board Sammy Aaron, have agreed to receive no salary.
Store closures have also been extended by the owner of New York & Company and Fashion to Figure, which announced on Monday that it will be closely monitoring advice from the CDC, the WHO and government officials in order to determine the best time to reopen its retail locations.
In the meantime, the NYC-based fashion retailer has furloughed all store associates and a “significant portion” of its corporate workforce, leading to a reduction of around 80% in the company’s weekly payroll expense.
RTW Retailwinds’ e-commerce platforms and third-party fulfillment center continue to operate.
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