Number one goal: remain liquid. Capri Holdings expects the pandemic to force stores in Europe and the USA to remain close at least till the end of May. A severe lockdown that the US multinational, owner of Michael Kors, Versace and Jimmy Choo intends to face by cutting salaries and give furlough to its employees to remain liquid.
John D. Idol, president and CEO of Capri Holdings has defined the situation as “unpredictable” and “unprecedented”. He presented the group’s extraordinary plan by stating: “We are positive the group will bounce back in a positive area – his words – and believe we have the necessary financial resources to be able to come out of this as a strong business”. Capri Holdings donated 3 million USD to the fight against Coronavirus.
The steps include a 50% reduction of the board’s stipends. Moreover: the group’s CEO, along with those of the three brands, will not be given a salary for the year 2020 and the company is considering reducing the rest of the stipends by circa 20% of the current value. Capri Holding expects to cut employees, but hasn’t stated by how much yet. As of April 11th, about 7,000 employees from the branded stores in North America will be laid off, while the European colleagues will be given furlough.
Among the other steps taken is the significant reduction of purchases of supplies, so as to not increase stock and delay payments to suppliers. Additionally, investments have been reduced, operational costs cut and the blockage of the 400-million USD buyback option that the group was conducting.