Genesco Inc. Announces Additional Actions In Response To Impact Of COVID-19
- Announced it had furloughed employees and reduced headcount in its Middle Tennessee area corporate offices, call centers and distribution centers. Furloughed employees will continue to receive Company-offered health care benefits and Genesco will pay both employee and company premiums. Combined with the store and other furloughs already announced, the Company has reduced its workforce by 90%. In addition, more highly compensated employees will have their pay reduced based on a graduated scale and certain employee benefits, including 401(k) matching, will be temporarily suspended.
- The Company's
U.K.-based Schuh business has announced that, effective April 3, 2020, it has reopened its e-commerce operations in compliance with government health and safety practices.
The actions previously announced, include:
March 27, 2020, Genesco announced that its 1,480 North American and U.K.stores, after being closed earlier in March, would remain closed until it can safely reopen for employees and customers. Genesco continues to serve its customers online at www.journeys.com, www.journeyskidz.com, www.journeys.ca, www.littleburgundyshoes.com, www.schuh.co.uk, www.johnstonmurphy.com and www.johnstonmurphy.ca.
- Genesco also announced at that time that it implemented furloughs for 3,000 full-time store employees in
North America, and 3,500 store, corporate office and distribution center employees in the U.K.
- Also last week, effective
April 1, 2020, Genesco President and Chief Executive Officer Mimi E. Vaughn, and a number of her direct reports, will receive no salary beyond benefits, and the remainder of the senior management team will receive a 50% reduction in salary.
- Executive Chairman
Robert J. Denniswill not receive a salary, and the board of directors will also forego their cash compensation in support of the Company's cost cutting efforts.
- The Company previously disclosed in its most recent 10-K filing that it had borrowed
$184.3 million, as a precautionary measure to ensure funds are available to meet its obligations for a substantial period of time. The Company's total remaining liquidity on its U.S.credit facility is $50 million. U.K.-based Schuh has borrowed £19 million under its revolving credit agreement, as previously disclosed. The Company's cash and investments on hand totaled approximately $214 millionand £17 million, inclusive of these borrowings.
As a result of these and other cost reduction actions, including those relating to real estate and supply chain, the Company believes its cash reserves are sufficient to meet its needs, even if stores remain closed for several months.
"These are extraordinary times for our Company and the markets in which we operate. We have had to make very difficult decisions in response to this crisis, the ones relating to our passionate and outstanding people, who are the driving force behind our businesses, were the most difficult of them all," said
Safe Harbor Statement
This release contains forward-looking statements, including those regarding the performance outlook for the Company and its individual businesses (including, without limitation, sales, expenses, margins and earnings) and all other statements not addressing solely historical facts or present conditions. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to estimates and projections reflected in forward-looking statements, including the effects of the COVID-19 coronavirus outbreak which began in 2019; the level and timing of promotional activity necessary to maintain inventories at appropriate levels; the timing and amount of any share repurchases by the Company; the imposition of tariffs on products imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company's ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; the effects of the British decision to exit the
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Genesco Inc. Financial Contacts, Mel Tucker, Senior Vice President, Chief Financial Officer, (615) 367-7465, email@example.com; Genesco Inc. Media Contact, Claire S. McCall, Director, Corporate Relations, (615) 367-8283, firstname.lastname@example.org, Dave Slater, Vice President, Financial Planning & Analysis and IR, (615) 367-7604, email@example.com