Tapestry extends store closures, boosts financial flexibility on ramped up Covid-19 relief effort
Tapestry Inc., parent company of Coach, Kate Spade and Stuart Weitzman, has announced a new set of initiatives to support its employees and boost its financial flexibility as the Covid-19 pandemic continues to impact the economy.
The new initiatives mark the latest move from the company, since it announced that it would temporarily close all of its directly operated stores in North America and Europe earlier this month. The company has now extended these store closures for an additional two weeks through April 10.
Employees at these closed stores will continue to receive pay and benefits over the next four weeks, the company said, and the company will release further store closure decisions on a bi-weekly basis.
Nearly all of the company’s stores in China have re-opened, while elsewhere in Asia, the majority of our stores are open and operating on shortened hours.
Tapestry’s e-commerce platforms and distribution centers remain operational globally, across all major regions.
Like Target, LVMH and more, Tapestry is another member of the retail industry contributing to aid efforts during the pandemic. To offer assistance, Tapestry's foundations will match gifts made by Tapestry employees in North America to support qualified charitable Covid-19 causes, up to $10,000 per employee under Tapestry’s matching gift program, the company said.
In addition, the company said it will donate 15,000 masks to hospitals in the U.S., the U.K. and Spain, with additional masks expected to be delivered in April.
The Coach Foundation will also make an additional contribution to an organization crowd-sourced by employees in North America, and both the Coach and Kate Spade New York Foundations are working to partner with private and public sector entities that are working to help those in need.
The company finished 2019 with $1.2 billion in cash and short-term investments. To bolster liquidity, the company is drawing down $700 million from its $900 million revolving credit facility, has suspended its quarterly cash dividend beginning in the fourth quarter of fiscal 2020, and is exploring opportunities to cut "non-essential operating expenses, while reducing capital expenditures and tightly managing inventories," Tapestry said.
The company said it is also suspending its share repurchase program. Currently, the company has $600 million remaining on its current share repurchase authorization following $300 million in repurchases completed in the first quarter of fiscal year 2020.
“In this period of unprecedented volatility, we are focused on our stakeholders, including our employees and stockholders," said Jide Zeitlin, chairman and CEO of Tapestry.
"We are taking immediate steps to support our employees and local communities. We have an 80-year history of successfully navigating external crises. Our three brands are powerful and resonate deeply with consumers globally. This, along with the resilience of our teams, underscores our confidence in the future.”
Tapestry said it will provide an update on the operational and financial impacts of the outbreak on its global business during its third quarter fiscal 2020 conference call scheduled for April 30, 2020.
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