Columbia Sportswear Co. has taken steps to bolster its liquidity as the coronavirus pandemic continues to keep many of its stores closed.
In a release yesterday, the Portland, Ore.-based company announced that it has drawn down $375 million from its total credit line of $631 million. As of Dec. 31, the Sorel parent had $686 million in cash and equivalents, with no debt on its balance sheet.
“While it is impossible to predict how long this crisis will last, we entered into it in a position of strength, and our objective is to carefully navigate this environment to ensure the company’s long-term success,” said chairman, president and CEO Tim Boyle. “We have weathered many storms during Columbia’s 81-year history, and I am confident that we will get through this one as well.”
What’s more, Columbia announced that it was withdrawing its first-half and full-year 2020 outlook. (On Feb. 6, when it posted its fourth-quarter earnings results, the company noted that its full-year outlook did not include the potential financial hit from the COVID-19 crisis. A press release later that month indicated that the company anticipated results to be “significantly affected” by the outbreak.) It will provide an update of its business during its first-quarter earnings call scheduled for April 30.
Watch on FN
The outdoor apparel company has already suspended quarterly dividend payments and share repurchases, as well as reduced fall inventory orders as it anticipates a decline in consumer demand.
While the majority of Columbia’s outposts in China and Korea have reopened, many continue to operate with reduced hours. “In these markets, retail traffic trends have been improving but remain well below pre-pandemic levels,” the company added.
Japan — which exhibited a similar recovery trends to the rest of Asia until recent weeks — has seen a spike in new coronavirus cases, prompting more store closures. Across North America and Europe, Columbia’s stores remain shuttered.
To help the company weather the pandemic’s impact, Boyle has cut his pay to $10,000 a year, while at least 10 other top executives have taken a voluntary 15% salary reduction. (According to SEC filings, Boyle took home total compensation of $3.3 million in 2018. Figures for 2019 have not yet been disclosed.)
As Columbia Extends Store Closures, CEO Tim Boyle Cuts Salary to $10K
Sorel Propels Columbia Sportswear to Earnings and Sales Beat