As it navigates through the coronavirus pandemic, PVH Corp. is the latest company to announce furloughs and executive pay cuts.
In North America, where most of its workers are based, the Calvin Klein and Tommy Hilfiger parent announced that it will furlough or reduce hours for about 75% of its store, office and warehouse workers. Associates who remain full-time will see their pay cut by between 5% to 20%, depending upon their salary level. PVH will cover all associates’ share of medical benefits as its doors stay closed.
With store closures also continuing in Australia, Brazil and almost all of Europe, PVH is eying expense cuts abroad as well. The corporation is pursuing governmental assistance in Europe to help offset payroll expenses and is investigating similar options in Brazil. “Almost all” of its associates in Australia have been furloughed. Meanwhile, most stores in Asia have reopened — but units are currently operating with limited hours and reduced traffic. For this reason, PVH is reducing salaries for its office workers in the region.
Meanwhile, PVH is making cuts to executive pay as the coronavirus pandemic continues. Manny Chirico, chairman and CEO, has decided to forgo his salary for the duration of the crisis, and the board of directors will not take cash compensation during this period. Additionally, about 250 senior leaders and execs of the company will see their salaries reduced by up to 50%.
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“We are doing everything in our power to best position PVH for long-term stability, while considering the impacts to all of our key stakeholders,” stated Chirico. “We have been forced to take proactive steps to reduce our expenditures and preserve our cash position. While this is requiring difficult short-term decisions, we are confident that our actions will lead us to a stronger future.”
Similar to other fashion and footwear retailers, PVH is taking steps to maintain its cash flow. The company said it is tightly managing its inventories and plans to cut costs by cancelling commitments, consolidating future seasonal collections and holding certain inventory for a later date. PVH drew down $750 million from a $1 billion-plus revolving credit facility to bolster its balance sheet, and is reviewing “every opportunity” to cut back on discretionary spending, with capital expenditures slashed to $190 million for 2020 versus $345 million in 2019. The corporation also completed the $170 cash million sale of its Speedo North America business to Pentland Group PLC this month.
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