Brown Shoe Co. announced on Wednesday it had initiated a number of cost-cutting measures, including the closure of 30 to 35 Famous Footwear stores.
The company also announced a workforce reduction that will take place in the next two weeks, though it didn’t detail the number of jobs that would be shed. Layoffs will follow a round of voluntary resignations that will come with payments and benefits that exceed the company’s base severance package.
Brown Shoe reported that it would discontinue wholesale shipment processing at its Fredericktown, Mo.-based distribution center, resulting in 59 permanent layoffs. Also, the company discontinued merit pay increases for executives in 2009 and made changes to its incentive compensation structure.
In all, the company’s cost-reduction plan is estimated to yield about $22 million in savings during fiscal 2009.
The company also said it had amended its revolving credit facility, raising it from $350 million to $380 million. The new plan comes with the ability to request an increase to $530 million. The credit will be used to back letters of credit, as well as for working capital.