Caleres Expands Liquidity Position
14 April 2020 - 11:35PM
Business Wire
Exercises accordion feature
Caleres (NYSE: CAL, caleres.com), a diverse portfolio of global
footwear brands, today announced it has exercised a portion of the
accordion feature on its asset-based revolving credit facility. The
exercise increases the available borrowing capacity under the
facility by $100 million to a total of $600 million.
“We appreciate the strong support from our lenders and their
confidence in the long-term outlook for Caleres,” said Ken Hannah,
senior vice president and chief financial officer. “This increase
in our borrowing capacity – coupled with our ongoing efforts to
reduce cash outflows – will help ensure Caleres has adequate
liquidity to weather the current economic shutdown.”
Following this exercise, Caleres has in excess of $335 million
of liquidity, including $175 million of cash, with no significant
debt maturities until 2023.
In recent weeks, the company has outlined the actions it is
taking to align the organization to this new reality. As a result
of disciplined cash outflow management and strong ecommerce related
sales to date, Caleres has maintained its cash position since it
began to close its retail stores in mid-March. Consistent with this
effort, Caleres has reduced its 2020 capital spending budget by 40
percent versus 2019 levels, to approximately $30 million.
Caleres Cares
Caleres remains united with the world in fighting the spread of
COVID-19. Mask production at the Allen Edmonds factory in Port
Washington, Wisconsin continues. These dedicated employees have
manufactured nearly 50,000 masks to date, distributing this
protective wear to healthcare facilities in the region.
Additionally, Allen Edmonds has made a donation to Two Ten’s Share
Your Shoes program. Vionic has made donations of insoles and shoes
to a number of hospitals in California and New York – states both
significantly impacted by the virus. Finally, as token of
appreciation, Rykä launched #Rykäfornurses, which offers nurses
across the nation a free pair of Rykäs for the hard work they are
doing every day. As the global community continues to grapple with
the situation at hand, Caleres will continue to look for ways to
support the broader community, its frontline workers as well as the
families that are being disproportionately affected by this
crisis.
“Although our retail locations are closed, we continue our
efforts to drive sales and are focused on meeting the needs of
consumers as they adjust to their new version of normal,” said
Diane Sullivan chief executive officer, president and chairman.
“During this unprecedented time, we continue to reduce
expenditures, manage inventory and protect liquidity; connect with
loyal and new consumers; pivot to a digital-only platform; and
support our communities. We greatly appreciate the dedication of
our Associates, the loyalty of our consumers and the support from
our financial and trade partners and thank them for their great
confidence in Caleres.”
The company’s syndicate included seven banks, with Bank of
America, N.A. acting as the administrative agent and collateral
agent.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
This press release contains certain forward-looking statements
and expectations regarding the company’s future performance and the
performance of its brands. Such statements are subject to various
risks and uncertainties that could cause actual results to differ
materially. These risks include (i) the recent coronavirus outbreak
and its adverse impact on our business operations, store traffic
and financial condition (ii) changing consumer demands, which may
be influenced by consumers' disposable income, which in turn can be
influenced by general economic conditions and other factors; (iii)
impairment charges resulting from a long-term decline in our stock
price; (iv) rapidly changing fashion trends and consumer
preferences and purchasing patterns; (v) intense competition within
the footwear industry; (vi) political and economic conditions or
other threats to the continued and uninterrupted flow of inventory
from China and other countries, where the company relies heavily on
third-party manufacturing facilities for a significant amount of
its inventory; (vii) imposition of tariffs; (viii) the ability to
accurately forecast sales and manage inventory levels; (ix)
cybersecurity threats or other major disruption to the company’s
information technology systems; (x) customer concentration and
increased consolidation in the retail industry; (xi) transitional
challenges with acquisitions; (xii) a disruption in the company’s
distribution centers; (xiii) foreign currency fluctuations; (xiv)
changes to tax laws, policies and treaties; (xv) the ability to
recruit and retain senior management and other key associates;
(xvi) compliance with applicable laws and standards with respect to
labor, trade and product safety issues; (xvii) the ability to
maintain relationships with current suppliers; (xviii) the ability
to attract, retain, and maintain good relationships with licensors
and protect our intellectual property rights; and (xix) the ability
to secure/exit leases on favorable terms. The company's reports to
the Securities and Exchange Commission contain detailed information
relating to such factors, including, without limitation, the
information under the caption Risk Factors in Item 1A of the
company’s Annual Report on Form 10-K for the year ended February 1,
2020, which information is incorporated by reference herein and
updated by the company’s Quarterly Reports on Form 10-Q. The
company does not undertake any obligation or plan to update these
forward-looking statements, even though its situation may
change.
About Caleres
Caleres is the home of today’s most coveted footwear brands and
represents a diverse portfolio spanning all of life’s styles and
experiences. Every shoe tells a story and Caleres has the perfect
fit for every one of them. Our collections have been developed and
acquired to meet the evolving needs of today’s assorted and growing
global audiences, with consumer insights driving every aspect of
the innovation, design, and craft that go into our distinctly
positioned brands, including Famous Footwear, Sam Edelman,
Naturalizer, Allen Edmonds, Vionic, Dr. Scholl’s Shoes, and more.
The Caleres story is most simply defined by the company’s mission:
Inspire people to feel great…feet first.
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version on businesswire.com: https://www.businesswire.com/news/home/20200414006021/en/
Ken Hannah khannah@caleres.com
Logan Bonacorsi lbonacorsi@caleres.com
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