Coach parent extends store closures, employee pay; cutting costs
Tapestry is keeping its store doors closed for another two weeks, at least.
The parent company of Coach, Kate Spade and Stuart Weitzman has extended store closures in North America and Europe for an additional two weeks, through April 10. Tapestry said it will reassess store closure decisions on a bi-weekly basis. Employees at closed locations will continue to receive pay and benefits during the next four weeks.
In addition, the company, which closed calendar 2019 with $1.2 billion in cash and short-term investments, is drawing down $700 million from its $900 million revolving credit facility to add to cash balances. It’s also suspending its share repurchase program quarterly cash dividend beginning in the fourth quarter of fiscal 2020. (Tapestry’s previously announced quarterly cash dividend of $0.3375 cents per common share payable on March 30, 2020 is not affected by the suspension.)
Tapestry said it is “reviewing every opportunity to eliminate non-essential operating expenses, while reducing capital expenditures and tightly managing inventories.”
“Out of an abundance of caution, we have acted to augment our strong liquidity and reinforce our financial flexibility,” said Jide Zeitlin, chairman and CEO of Tapestry. 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 noted that across its three brands, nearly all of its stores in China have re-opened and customers are gradually returning. Elsewhere in Asia, the majority of its stores are open, but with shortened hours.