Tapestry, Inc. (NYSE:TPR), a leading New York-based house of
modern luxury accessories and lifestyle brands, today announced
additional actions that the Company is taking to reinforce the
financial strength of the organization amid the deepening global
impact of the Covid-19 pandemic.
“During this deepening crisis we are guided by our values,
prioritizing the health and wellbeing of our employees, their
families, our customers, and communities. These values are guiding
us through many important decisions. We continue to pay our retail
associates, despite store closures. We have heightened safety
precautions in our distribution centers, and are maintaining remote
working for our corporate employees in numerous global offices. We
are supporting our local communities and those on the front lines
impacted by the pandemic through our respective brand foundations
and philanthropic initiatives,” said Jide Zeitlin, Chairman and
Chief Executive Officer of Tapestry, Inc. “With the passage of
time, we are facing increasing pressure on the financial
performance of the business, requiring us to make difficult
decisions to ensure that Tapestry and its brands continue to thrive
well into the future. These decisions are balanced with numerous
steps to moderate the impact of the current environment on our
people.”
Mitigating Actions:
Tapestry is taking pre-emptive actions to mitigate the impact of
the novel coronavirus on its business. The specific measures
include:
A Focus on Revenue:
- Re-opening stores in China as quickly as possible, while
following governmental and public health guidelines. All stores on
the Mainland are now open;
- Aggressively leaning into the global digital opportunity
for all brands. Ensuring that the Company’s e-commerce platforms
and distribution centers remain operational across all major
regions;
Eliminating Non-Essential Operating Costs Across All Key Areas
of Spend:
- Driving SG&A savings through the right-sizing of
marketing expenses to adjust to the lower revenue base, while
maintaining a focus on digital; reducing fixed costs such as rent;
driving procurement savings, including reducing external third
party services;
Strengthening the Company’s Balance Sheet and Enhancing
Financial Flexibility:
- Tightly managing inventories by reflowing late spring
and early summer product introductions and cancelling inventory
receipts for late summer/early fall 2020;
- Reducing Capex by delaying or cancelling new store
openings, while prioritizing investment in high-return projects
aligned with the multi-year growth agenda, notably in digital.
Preserving Liquidity, as Previously Announced:
- Drawing down $700 million from its $900 million revolving
credit facility to add to cash balances;
- Suspending its quarterly cash dividend beginning in the
fourth quarter of fiscal 2020; and
- Suspending its share repurchase program.
Addressing Organizational
Costs:
Maintaining Retail Flexibility:
Tapestry will continue to assess reopening stores on a location
by location basis globally, in accordance with the guidance of
local governments and public health organizations, to determine
when we can safely begin reopening for business. Tapestry’s store
teams are integral to the business as brand ambassadors who balance
customer relationships, product knowledge, and sales capability.
The Company is committed to supporting these teams, while
acknowledging the need to make difficult decisions in light of the
environment by:
- Extending salary and benefits to the vast majority of its North
America retail team through May 30th at which time the Company will
furlough most assistant store managers and sales associates where
stores have not reopened. This extension will continue to support
employees and allow for the swift and safe reopening of stores at
the appropriate time;
- Reducing its retail workforce in North America by approximately
2,100 part-time store associates across the three brands effective
April 25th. These employees will receive a one-time payment of
$1,000 to reduce the financial burden of this action; and
- Applying for available government payroll subsidy programs in
various countries to mitigate payroll expense.
Minimizing Corporate Costs:
The Company is taking the following actions, which will take
effect at the beginning of fiscal 2021, unless otherwise noted, and
are expected to remain in effect for up to 12 months:
- A 50% reduction in cash compensation for the Board of
Directors;
- A 50% salary reduction for Chairman and Chief Executive Officer
Jide Zeitlin;
- Salary reductions of 5% to 20%, depending on salary level, for
all North America corporate employees above a certain salary
threshold. The Company plans to achieve similar compensation
reductions outside North America through similar measures;
- Cancellation of the Company’s Annual Incentive Plan (AIP) for
fiscal year 2020, which will result in no bonuses being paid for
the current fiscal year; and
- Elimination of merit salary increases for all employees for
fiscal year 2021.
In addition, the Company is working to identify long-term
efficiency opportunities by accelerating the work already underway
as part of Tapestry’s multi-year growth agenda. As part of this
initiative, to create an agile operating model, the Company
anticipates making additional changes in coming months that will
result in a streamlined organization, including reductions in the
corporate workforce. This work will result in further cost savings
and will enable Tapestry to be more responsive to the rapidly
changing retail environment.
With these additional actions, Tapestry continues to balance
support for its employees, customers and business. Looking ahead,
the Company will continue to consider near-term exigencies and the
long-term financial health of the business as clear steps are taken
to mitigate the consequences of the Covid-19 pandemic.
The Company will provide an update on the operational and
financial impacts of the coronavirus outbreak and mitigating
actions during its third quarter fiscal 2020 conference call
scheduled for April 30, 2020.
Tapestry, Inc. is a New York-based house of modern luxury
lifestyle brands. The Company’s portfolio includes Coach, Kate
Spade and Stuart Weitzman. Our Company and our brands are founded
upon a creative and consumer-led view of luxury that stands for
inclusivity and approachability. Each of our brands are unique and
independent, while sharing a commitment to innovation and
authenticity defined by distinctive products and differentiated
customer experiences across channels and geographies. To learn more
about Tapestry, please visit www.tapestry.com. The Company’s common
stock is traded on the New York Stock Exchange under the symbol
TPR.
This information to be made available in this press release may
contain forward-looking statements based on management's current
expectations. Forward-looking statements include, but are not
limited to, statements regarding the Company’s dividend and share
repurchase program, anticipated future organizational actions and
the statements that can be identified by the use of forward-looking
terminology such as "may," "will," “can,” "should," “confident,”
“future,” "expect," "intend," "estimate," "continue," "project,"
"guidance," "forecast," “outlook,” “believe,” "anticipate,"
“proactive,” “preemptive,” “excited about,” “moving,” “leveraging,”
“capitalizing,” “developing,” “drive,” “targeting,” “assume,”
“plan,” “build,” “pursue,” “maintain,” “on track,” “well positioned
to,” “commit,” “look forward to,” “to acquire,” “achieve,”
“strategic vision,” “growth opportunities” or comparable terms.
Future results may differ materially from management's current
expectations, based upon a number of important factors, including
risks and uncertainties such as expected economic trends, the
ability to anticipate consumer preferences, the ability to control
costs and successfully execute our transformation and operational
efficiency initiatives and growth strategies and our ability to
achieve intended benefits, cost savings and synergies from
acquisitions, the risk of cybersecurity threats and privacy or data
security breaches, the impact of tax legislation, the impact of the
COVID-19 outbreak, etc. Please refer to the Company’s latest Annual
Report on Form 10-K, Quarterly Report on Form 10-Q and its other
filings with the Securities and Exchange Commission for a complete
list of risks and important factors. The Company assumes no
obligation to revise or update any such forward-looking statements
for any reason, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200420005250/en/
Tapestry, Inc. Analysts & Media: Andrea Shaw Resnick Global
Head of Investor Relations and Corporate Communications
212/629-2618 aresnick@tapestry.com Christina Colone Vice President,
Investor Relations 212/946-7252 ccolone@tapestry.com
Tapestry (NYSE:TPR)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Tapestry (NYSE:TPR)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024