DODGEVILLE, Wis. — April 6, 2020 — Lands’ End, a uni-channel retailer known for high-quality apparel for the whole family and the home, provided an update on recent actions related to COVID-19.
Jerome Griffith, CEO and president of Lands’ End, stated: “At Lands’ End, the safety and health of all our employees is our first priority and we are taking steps to minimize risk through work-at-home policies, as well as practicing social distancing and enhanced sanitation in our facilities. Given the uncertainty related to the severity and duration of COVID-19, we have also taken proactive steps to reduce costs, carefully manage inventory, and preserve liquidity.”
A furlough of approximately 70 percent of Lands’ End’s corporate employees and nearly 100 percent of its retail employees began on March 28, 2020. While some of these personnel executing critical tasks will return to work on April 14, 2020, for many, the furlough will remain in effect through at least May 1, 2020, in line with the federal government’s and with the State of Wisconsin’s current timeline for the continuation of social distancing. Lands’ End currently plans to fund health insurance premiums for employees while they are furloughed, through May 1, 2020. In addition, the company’s 26 U.S. stores, which closed on March 16, will remain closed until further notice, and in line with local guidance in the markets Lands’ End serves.
The company’s website, www.landsend.com, remains open 24/7 and the customer service team will be available via phone or text at 800-963-4816 or via email at email@example.com to provide service and to answer any questions customers may have.
In addition, the company’s Wisconsin-based distribution centers remain operational, and employees in this area are receiving a temporary increase in pay for all hours worked. In the interest of the safety of employees, the company has made modifications to days of operation, and is maintaining six feet of space between employees. Lands’ End continues to follow guidance from public health officials and government agencies, including the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO), and is regularly performing deep cleaning and disinfecting processes.
Other cost reduction actions include:
- Temporarily reducing base salaries — As previously announced, Griffith’s base salary has been reduced by 50 percent, the base salary of his executive team has been reduced by 20 percent and scaled reductions are being taken throughout the company.
- Eliminating fiscal 2020 merit increases.
- Temporarily suspending the company’s 401 (k) match.
- Temporarily reducing board of directors compensation.
- Reducing capital expenditures to approximately $20 million in 2020 from $40 million in 2019.
- Significantly reducing other discretionary operating expenses.
With respect to liquidity, as reported in its Annual Report on Form 10-K, the company increased capacity under its ABL Facility by $25 million, so that maximum borrowings are $200 million. The company has drawn $75 million from the facility to provide it with extra working capital and cash on hand. As of April 6, 2020, $115 million in capacity remained available under the ABL Facility.
Lands’ End’s ties to the local Wisconsin communities where it operates run deep, and the company is committed to helping its community members, many of whom are employees or family members of employees. As part of its local response to the COVID-19 outbreak, the company has donated new Lands’ End scrubs to Upland Hills Health in Dodgeville, Wisconsin to help support its staff when caring for patients, provided the staff of Reedsburg, Wis., Area Medical Center with jackets to wear in their outdoor triage area and in partnership with the Wisconsin Department of Administration, is providing, free of charge, distribution center capacity for the staging and distribution of Personal Protection Equipment (PPE) by the Department of Military Affairs.
“We remain committed to our employees and community, and we are ready and able to serve our customers online. While we don’t know the duration of this pandemic, and its overall impact, we do know that Lands’ End is an iconic brand with a strong American heritage, and we are ready to meet the needs of our loyal customers at this difficult time. Our brand has made it through rough environments over its nearly 60-year history, and the actions we are taking combined with our liquidity position give me confidence in our ability to weather this storm,” said Griffith.
Posted April 6, 2020
Source: Lands’ End, Inc.