Caleres, the parent of Famous Footwear, said that as part of these efforts to preserve cash, it has made the difficult decision to align its staffing needs with the current reduced requirements of the business.
As a result of this realignment, Caleres found it necessary to lay off or furlough associates across its retail stores, distribution centers and corporate operations, and has implemented a meaningful salary reduction across all levels of the remaining global workforce including the executive leadership team and the company’s board of directors. Furloughed employees will continue to receive healthcare benefits with Caleres paying both employee and company premiums during this time. The company expects to maintain minimal staffing levels while its stores are closed.
“These are difficult steps, and we are acutely aware of the impacts on our Associates, their families and our local communities,” said Diane Sullivan, chief executive officer, president and chairman, shown above. “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 also noted that in recent weeks it has moved quickly to drive down costs in all areas of the business and to manage the variables within its control to ensure that it is positioned for future success. Caleres is leveraging its relationships within its supply chain to reduce inventory and receipts and extend credit terms, deferring or canceling capital projects, limiting cash outflows associated with the retail store closures, postponing certain marketing activities and evaluating promotional cadence.
Ongoing Operations and E-commerce Update
With its stores closed, Caleres said it is sharply focused on meeting the needs of its customer base and engaging with new customers in the footwear market through its e-commerce channel. The company is using its large, competitively advantaged network of distribution centers and Famous Footwear locations to fulfill online orders and to provide drop-ship services for its retail partners’ digital platforms. Even before the virus, global consumers were increasingly turning to e-commerce for their footwear needs, said the company, with the company’s e-commerce-related direct-to-consumer business expanding 23 percent year-over-year in 2019. Given the investments made in its platform and its capabilities, Caleres said it is confident that it is ready to handle the expected acceleration in the e-commerce business and is well-positioned to thrive.
Community Response and Support
To assist with the COVID-19 crisis response, Caleres is working to help address supply shortages for healthcare workers. It has recently redirected skilled sewers to manufacture thousands of masks per day at its Allen Edmonds factory in Port Washington, WI. The masks are being delivered to hospitals in the Wisconsin region. Caleres has also donated N-95 masks to healthcare systems and first responders in New York and Saint Louis, MI and has partnered with Crocs to deliver free footwear to healthcare professionals. The company is also donating shoes to the Two Ten Footwear Foundation’s Share Your Shoes campaign drive.
“Guided by our strong leadership team and supported by our loyal workforce and solid balance sheet, 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 continued. “Moreover, we believe our high-quality brands – which consumers know and trust – are exceptionally well-positioned for these uncertain and highly dynamic times.”
Photo courtesy Shutterstock
