Steven Madden Ltd. has become the latest footwear company to announce furloughs and pay cuts — including those of its top executives — as the coronavirus crisis continues to batter retail across the board.
In a filing today with the Securities and Exchange Commission, the New York-based shoemaker announced plans to furlough a “significant” number of its workers starting April 1. Those who take home more than $100,000 a year, on the other hand, will see their salaries reduced by graduated amounts. Employees will still be able to retain their medical benefits.
What’s more, founder and creative chief Steve Madden as well as chairman and CEO Edward Rosenfeld will not be paid, while the salaries of the company’s president, CFO, COO and merchandising chief will be reduced by 30%. The board of directors has also agreed to hold off on all of its members’ cash compensation.
Beyond furloughs and pay cuts, the footwear and accessories business has taken precautionary measures to maintain its liquidity and financial flexibility in light of the pandemic: It has not only suspended its quarterly cash dividend and stock repurchases, it has also scaled back on nonessential operating expenses, capital expenditures and planned inventory receipts.
In addition, the retailer tapped $30 million from its credit facility to keep its business afloat as its stores remain shuttered to follow new government-issued coronavirus social distancing guidelines. The company announced two weeks ago that all of its outposts across the United States would be closed until March 27 and that it would pay its workers during this period.
On March 18, Steve Madden said it was pulling its fiscal year 2020 revenue and earnings guidance as a result of the “increasing uncertainty related to the potential impact of COVID-19 on the company’s global business operations.” In its fourth-quarter and full-year earnings report on Feb. 27, the retailer had predicted a revenue gain of 0% to 1% and diluted earnings per share in the range of $1.70 to $1.80 for fiscal 2020. As of Dec. 31, its cash, cash equivalents and current marketable securities were about $304.6 million.
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