Capri says stores could remain closed until June

Worldwide
Published:  07 April, 2020
Varenne bowling bag by Jimmy Choo

The owner of the Versace, Michael Kors and Jimmy Choo fashion brands said it has taken further additional actions to preserve its cash flows and maintain its financial strength.

As of April 1, 2020, Capri Holdings said it had total cash and cash equivalents on its balance sheet of approximately US$900 million and that it has fully drawn the remaining US$300 million of availability under its revolving credit facility. Further additional actions to preserve its cash flows and maintain its financial strength include reducing Board of Director pay by 50% for fiscal 2021; foregoing and reducing executive compensation, with CEO and Creative Officers voluntarily electing to forgo their salary for fiscal 2021; restructuring corporate organisation - the company anticipates reducing its corporate workforce in order to generate additional payroll savings; significantly reducing inventory purchases; and applying to payroll subsidy programmes in various countries throughout Europe.

Capri Holdings said it has provided salary continuation and benefits to all retail U.S. store employees impacted by the temporary store closures since March 18, and it now anticipates that retail stores in North America and Europe to be closed until approximately June 1. “The company has therefore made the difficult decision that effective April 11, 2020 it will furlough all of its approximately 7,000 North America retail store employees”, said a statement. The Group expects to require a smaller workforce as it resets its business post-COVID-19, and said its goal is to return as many retail employees as possible to work in the second half of the fiscal year as its business rebuilds.

Other measures announced by Capri Holdings include extending payment terms, reducing capital expenditures, minimising operating expenses and suspending share buybacks.