Footwear and apparel giant VF Corp. today said it would take further steps to shore up its business operations as the COVID-19 pandemic ravages retail.
The Denver-based company said Steve Rendle, its chairman, president and CEO, would cut his pay in half for the next four months, while the salaries of the company’s executive team would temporarily be slashed by 25%. Similarly, VF’s board would give up their cash retainers over the same four-month period.
On the retail front, the company — owner of The North Face, Vans and Timberland brands, among others — said its offices and stores in the North American and EMEA regions would remain closed until May 3, with employees continuing to receive full pay and benefits.
Conversely, most of VF Corp.’s retail stores in mainland China have reopened for business.
“Since the beginning of the COVID-19 outbreak, we’ve managed our response strategies with a people-first approach that prioritizes the health and well-being of our employees around the world,” Rendle said in a statement. “These new actions position us to continue supporting our people while also taking prudent measures to protect the financial integrity of our company as we manage through the prolonged disruption caused by this global health crisis.”
Still, the company, like many riding out the coronavirus-led financial crisis, plans to tap into its lines of credit to maintain cash flow.
In particular, VF said it would draw down the remaining $1 billion available under a senior unsecured revolving credit facility to “best position VF to capitalize on opportunities as it emerges from the COVID-19 pandemic.”
VF, which in 2019 was named Company of the Year at the FN Achievement Awards, has roughly $2.4 billion in cash on hand.
The firm, which spun off its jeans business last summer, is moving ahead with its previously announced plan to sell off the occupational portion of its work brands segment.
“Driving and optimizing our portfolio continues to be a top strategic priority for VF, and exploring strategic alternatives for our occupational work brands is the natural next step in that process,” Rendle said in January. “Divesting these brands would leave VF with a simplified portfolio of higher-growth, consumer-focused brands, while providing financial flexibility to fuel further strategic initiatives and enhance shareholder value.”