Shares of Tapestry (TPR) - Get Report fell Monday, after the owner of upscale retail brands Coach, Kate Spade and Stuart Weitzman said it would cut jobs and make other cost-saving moves in response to the coronavirus pandemic.
The company cut 2,100 part-time workers across its brands. Those staffers will receive severance payments of $1,000 each.
Tapestry store workers have been receiving their pay and benefits even as its stores have been closed. If the company can’t reopen its stores by May 30, it said, it will have to furlough most store associates and North American assistant managers. Until then, they will continue to get pay and benefits.
"With the passage of time, we are facing increasing pressure on the financial performance of the business, requiring us to make difficult decisions to ensure that Tapestry and its brands continue to thrive well into the future,” Chief Executive Jide Zeitlin said in a statement.
“These decisions are balanced with numerous steps to moderate the impact of the current environment on our people."
Tapestry also is halving cash compensation for the directors, similarly halving Zeitlin's salary, and paring salaries 5% to 20% for all North America corporate employees above a certain pay threshold.
In addition, the company is drawing down $700 million from its $900 million revolving credit facility to add cash, suspending its quarterly dividend and suspending its share repurchases.
At last check, Tapestry shares traded at $14.48, down 4.9%, compared with a 0.71% dip for the S&P 500 index. The stock has dropped 49% over the past three months.