Duluth Holdings Inc., the parent of Duluth Trading Company, announced additional measures to ensure its business and financial resiliency during the rapidly escalating impact of the COVID-19 pandemic.

“As we entered fiscal 2020, no one could have anticipated the severe impact of COVID-19 on our citizens and country. The retail sector deemed ‘non-essential’ has been especially hard hit and there is no clear line-of-sight to recovery. In this challenging time, our management and board had to make some difficult but necessary decisions to safeguard our long-term outlook. While I am confident in our brand and the resiliency of our company, we are taking additional precautions to prepare for extended business disruption in our retail stores. We are fortunate to have a strong online presence to provide uninterrupted and outstanding service to our customers, as we all weather this pandemic together,” said Steve Schlecht, executive chairman and chief executive officer of Duluth Trading.

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As previously reported, the company closed its stores on March 20, 2020 to protect its employees and customers. As a result, hourly store employees were temporarily laid off and provided with two weeks of pay. They will have the opportunity to be re-hired as soon as the retail stores are safe to re-open in accordance with state and local regulations. Duluth Trading continues to serve its customers through its online business, and its distribution centers remain fully operational. On April 6, the company provided staff at its distribution centers with a $2.50 hourly premium while Duluth Trading stores remain closed.

Additional measures to ensure business and financial resiliency include:

  • Six-month pay reduction for senior leadership ranging from 10 to 20 percent;
  • CEO Steve Schlecht will waive all cash compensation for the balance of fiscal 2020;
  • The Board of Directors will forego cash retainers for the second and third quarters;
  • Furloughs of varying lengths with benefits intact for 68 percent of salaried staff;
  • A permanent 10 percent reduction in corporate staff;
  • All operating expenses are under review including price concessions with vendors and reductions in lease expense for its fleet of retail stores;
  • To curtail capital expenditures, the company now plans to open four stores in fiscal year 2020, reducing its previously disclosed plan by one store; and
  • The company’s liquidity position as of April 10, 2020 is $85 million outstanding on its $130 million line of credit and $13 million in cash balance.

Photo courtesy Duluth Trading