Shoe Carnival Inc. announced it would be extending its store closures until further notice. The company will be evaluating the length of its store closures in-line with guidance from federal, state, and local governments, as well as the safety of its employees. At this time, the company will continue to pay its employees as scheduled, but will further evaluate as the length of the closures becomes clearer.
“Above all else, the well-being of our employees, customers and the communities we serve during this difficult period is our priority. We also know that the economic uncertainty that comes with government-mandated shelter-in-place orders has made many of our team members face financial hardships and our continued support during this period is critical,” stated Cliff Sifford, Shoe Carnival’s vice chairman and chief executive officer.
Sifford continued, “At the same time, we are taking decisive actions to manage costs across the company, which includes salary and discretionary expense reductions. While these are tough decisions, we believe they are necessary for the long-term success of Shoe Carnival. We would like to thank our team and customers for the strength and patience they have shown throughout this process, and we are looking forward to the day we are able to safely re-open our stores to the Shoe Carnival community.”
Maintaining Financial Strength and Flexibility
Shoe Carnival has taken a number of actions to preserve cash and liquidity. Effective immediately, the company’s Senior Executives and Board of Directors will substantially reduce their base salaries and cash retainer fees, respectively. These reductions for the Senior Executives and Board will continue until such time as at least 50 percent of the company’s store locations have reopened. In addition, Shoe Carnival is working with its supply chain partners to reduce inventories and extend credit terms, deferring non-essential capital projects, postponing marketing activities aligned with its brick & mortar stores, and evaluating its promotional activities.
As of today, the company continues to maintain liquidity with on-hand cash and cash equivalents and no cash borrowings against its current $50 million credit facility.
E-Commerce Operations and Activity
Shoe Carnival will continue to serve its customers through its website, shoecarnival.com and mobile app. As discussed on its fiscal fourth quarter and year-end 2019 conference call in March, the company’s e-commerce business has grown triple digits since the closure of its brick & mortar stores, and that growth has further accelerated in the last week. While Shoe Carnival is managing its marketing initiatives, it has largely focused on driving further traffic to this area of the business.
Photo courtesy Shoe Carnival