Vans and Timberland corporate parent VF Corp. (VFC) will forge ahead with dividend payments while temporarily suspending its stock buybacks and slashing executive compensation as it comes to grips with the impact of the coronavirus crisis.
VF on Tuesday said it is also drawing down the remaining $1 billion on its revolving credit line and slashing executive pay, while keeping its retail stores and offices in the U.S. and across North America closed until May 3.
Chief Executive Steve Rendle will halve his base pay, while his executive leadership team will see their paychecks shrink by 25%, with the cuts to be reviewed in four months, the company said in a statement.
With the drawdown of its credit line, VF said, it now has $2.4 billion in cash on hand and is "exploring opportunities to further enhance financial liquidity and the flexibility of its capital structure."
The 120-year-old Denver company said it is pushing ahead with plans to sell its occupational footwear unit and is now "actively engaged with prospective buyers."
The corporate parent of the Northface and Eastpak brands also noted that most of its stores in mainland China and through the Asia/Pacific region have reopened for business as the deadly virus has abated there.
The outdoor footwear and apparel retailer also said its global distribution hubs remain in service, with temperature screenings, protective wear, modified shifts and intensive cleaning used to prevent the spread of the virus.
VF said it would continue to pay store employees and office staff full pay and benefits as it extends the shutdown of its North American retail operations for an additional month.
"These new actions position us to continue supporting our people while also taking prudent measures to protect the financial integrity of our company," said Rendle.
Shares of VF at last check were up 10% at $60.20.