Columbia Sportswear has suspended its quarterly dividend, its stock repurchase program and its Feb. 6 guidance for its results in the first half of 2020 and the whole financial year. The company will provide a new update with its first-quarter results on April 30. Meanwhile, it reports that the vast majority of the Columbia stores in China and Korea have reopened, although many still operate with reduced store hours as retail traffic remains well below pre-pandemic levels.
The company’s own stores in North America and Europe remain closed, as do those of its retail partners. Its e-commerce operations have remained largely operational except for temporary closures in France and China, where they have since resumed. After paying regular wages for U.S. store employees for four weeks, it has transitioned them to a partial program of temporary layoffs through May 1, under which they can get unemployment insurance.
In anticipation of lower consumer demand, Columbia is reducing the production of inventory for the autumn 2020 season. Meanwhile, to further improve its liquidity, Columbia Sportswear has restated credit lines and drawn down $375 million from a total available borrowing capacity for $631 million as of April 15, including $50 million out of foreign credit lines of $106 million.
The company’s chairman, president and chief executive, Tim Boyle, who is giving up on a large part of his compensation along with top managers and the members of the board of directors, says it has entered the Covid-19 crisis “in a position of strength and our objective is to carefully navigate this environment to endure the company’s long-term success. We have weathered many storms during Columbia’s 81-year history,” he noted, “and I am confident that we will get through this one as well.”