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Foot Locker Furloughs Majority of Staff and Cuts Executive Pay

Athletic-shoe and -apparel retailer Foot Locker furloughed a majority of its staff. Its executives will take pay cuts and the board will forgo its cash compensation.
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Foot Locker FL shares were higher on Thursday after the athletic-shoe and -apparel retailer said that effective April 26 it was furloughing the majority of its employees in the U.S. and Canada, including supply-chain employees in the U.S.

And Foot Locker said that in response to the "unprecedented business impact" of the coronavirus pandemic," it would take a number of steps to address its sales decline.

The New York company said in a Securities and Exchange Commission filing that the staff would continue to be paid until April 25 and receive their health-care and other benefits during the furlough.

The company also cut its senior executives' pay. Chief Executive Richard Johnson will take a 40% pay cut starting May 3 and the board agreed to suspend its cash compensation. 

Last month, Foot Locker said its store closings included Foot Locker, Lady Foot Locker, Kids Foot Locker, Footaction, Champs Sports, Runners Point, and Sidestep.

The rest of Foot Lockers in the Asia Pacific region - which include Hong Kong, Singapore, Australia and New Zealand - will remain open subject to direction from local and national governments.

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Foot Locker has 3,129 retail stores in 27 countries across North America, Europe, Asia, Australia, and New Zealand.

"The well-being of our associates and the communities where we live and work, is of the utmost importance to us," Johnson said at the time. 

Foot Locker said in the SEC filing that to increase its cash position and financial flexibility, it was suspending share buybacks and halving its capital spending for fiscal 2021, ending Jan. 30.

The company said that it will provide an update on its status when it reports its first quarter results on May 22.

In February, the company reported stronger-than-expected fourth-quarter earnings, but weak holiday demand and tough competition in sports clothing markets held back same-store-sales growth.

At last check Foot Locker shares were 2.1% higher at $22.03.