Tapestry is laying off 2,100 retail workers and threatening to axe more jobs from June 1 as it seeks to weather the Covid-19 pandemic. The company is also focusing its resources in the digital field.
Tapestry, the parent company of shoemaker Stuart Weitzman and the Coach and Kate Spade brands, laid off about 2,100 part-time retail workers in North America on April 25, pointing to the deepening impact of the Covid-19 pandemic.
While Tapestry extended salary and benefits to most North American retail staff through May 30, the company warned it will furlough most assistant store managers and sales associates in places where stores have not re-opened by that date.
The company also announced other measures to cut costs and strengthen its balance sheet. It will adjust marketing expenses to a lower revenue base, while focusing on digital. It is also reducing fixed costs such as rent and pushing for procurement savings.
Tapestry is “tightly” managing inventories by rescheduling late spring and early summer product introductions and canceling inventory receipts for late summer/early fall 2020. It is also reducing capital expenditures by delaying or canceling new store openings, while prioritizing investment in high-return projects, notably in digital.
To underpin revenues it is re-opening stores in China “as quickly as possible.” All stores in mainland China are already open. Tapestry added that it is “aggressively leaning into the global digital opportunity” for all brands and ensuring that its e-commerce platforms and distribution centers remain operational across all major regions.
The company is drawing down $700 million from its $900 million revolving credit facility, as well as suspending its quarterly cash dividend and its share repurchase program.