As Caleres cuts costs across the business amid the accelerating coronavirus crisis, the company said today it is laying off and furloughing staff at its retail stores and distribution centers and in its corporate operations.
The St. Louis-based company did not detail how many employees would be impacted, but it said the remaining workforce, including the executive leadership team, would see “a meaningful salary reduction.”
Team members who are being furloughed will continue to receive health-care benefits, and Caleres will pay both employee and company premiums during the period. The move follows similar actions by major retailers such as Nordstrom and Macy’s as well as big shoe players like Steve Madden and Designer Brands.
Caleres, which also said today it would keep its Famous Footwear and branded locations closed until further notice, is taking more steps to preserve cash and bolster liquidity, a challenge for every company in the industry.
The initiatives in place include leveraging supply-chain relationships to reduce inventory and receipts, and extend credit terms. Caleres, which owns Sam Edelman, Vionic and Allen Edmonds, among other brands, also is deferring or canceling capital projects, postponing certain marketing efforts and evaluating promotional cadence.
“These are difficult steps and we are acutely aware of the impacts on our associates, their families and our local communities,” said Diane Sullivan, CEO, president and chairman in a statement. “While such decisions are never easy, we believe we are taking the appropriate actions to protect the long-term interests, health and stability of the organization, as well as the interests of all of our stakeholders. We view these actions as temporary, and I’ve given my commitment to our associates that the moment we can safely resume more normal business operations we will do so.”
Caleres said it is focusing on e-commerce operations while its stores are closed. The company is using its network of distribution centers and Famous Footwear store locations to fulfill online orders and provide drop-ship services to retail partners. In 2019, the company’s DTC business expanded 23% compared with the previous year.
“We’re confident that we are well equipped to weather this health crisis and will be ready to reopen our stores and welcome our associates and customers back when it’s safe to do so,” Sullivan said in the statement. “Moreover, we believe our high-quality brands, which consumers know and trust, are exceptionally well-positioned for these uncertain and highly dynamic times.”
To aid in the coronavirus fight, the firm also said it had started making thousands of masks a day at its Allen Edmonds factory in Port Washington, Wisc. The supplies are being delivered to Wisconsin hospitals, and Caleres has also donated N-95 masks to health-care systems and first responders in New York and St. Louis. In addition, it is partnering with Crocs on its health-care donation program and is contributing shoes to Two Ten’s “Share Your Shoes” campaign.