Kohl’s furloughs store employees; CEO forgoing salary; cuts cap expenditures
Kohl’s is joining Macy's Inc. in furloughing a good deal of its workforce and cutting capital expenditures as it extends store closings in the wake of the COVID-19 outbreak.
On the same day that Macy's announced it was furloughing nearly all its workforce, Kohl's said it will temporarily its furlough store and store distribution center associates, as well as some corporate office associates whose work has been significantly reduced by the store closures.
The company said it will continue to provide existing health benefits to furloughed associates at this time, and those impacted may benefit from the recently passed coronavirus stimulus legislation.
Kohl’s also said that CEO Michelle Glass will not take a salary as the company manages through the current crisis.
“It is an incredibly difficult decision to extend our store closures and temporarily furlough some of our associates,” said Gass. “We look forward to the day that we can reopen our stores to welcome our associates back and serve the millions of families across the country that shop Kohl’s.”
As part of the COVID-19 response, Koll’s is also taking the following actions to preserve financial liquidity and financial flexibility:
● Decreasing capital expenditures by approximately $500 million;
● Managing inventory meaningfully lower to align with anticipated sales;
● Significantly reducing expenses across the business including marketing, technology and operations while stores remain closed;
● Temporarily suspending share repurchases and evaluating its dividend program, and
● Fully drawing down its $1 billion revolving credit facility.
“As a company, we operate with great discipline to maintain a strong balance sheet and financial flexibility,” said Gass. “Given these extraordinary circumstances, we are taking difficult and decisive actions to strengthen our financial liquidity and secure the financial position of the company for the long-term benefit of our associates, customers and shareholders.”