Kohl’s stores won’t reopen any time soon.
With the uncertainty of the coronavirus pandemic, Kohl’s Corp. is temporarily furloughing store and store distribution center associates and some corporate office associates. The stores will be closed until further notice. The company made the announcement Monday afternoon in a news release.
The Wisconsin-based corporation plans to decrease its capital expenditures by half a billion dollars, it said in the news release.
“As a company, we operate with great discipline to maintain a strong balance sheet and financial flexibility,” said Michelle Gass, Kohl’s chief executive officer. “Given these extraordinary circumstances, we are taking difficult and decisive actions to strengthen our financial liquidity and secure the financial position of the company for the long-term benefit of our associates, customers and shareholders.”
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Kohl’s said the closures have had a “significant impact” on its business. Kohl’s has more than 1,100 stores in 49 states.
Kohl’s announced March 19 that its stores would be closing temporarily. The potential reopening date was April 1.
At that time, Kohl’s said store associates and distribution center associates would be provided with two calendar weeks of pay. Those employees will be furloughed until stores reopen. Health benefits for those employees will continue, the news release said.
The majority of Kohl’s store associates and distribution center associates — about 85,000 employees — will be furloughed.
Gass will not take a salary during this time. Marketing, technology and operations will all take a hit to reduce expenses. Kohl’s has fully drawn its $1 billion unsecured credit facility. It has suspended share repurchases and is evaluating its dividend program.
“It is an incredibly difficult decision to extend our store closures and temporarily furlough some of our associates,” Gass said. “We look forward to the day that we can reopen our stores to welcome our associates back and serve the millions of families across the country that shop Kohl’s.”
Its online operations remain functioning. Starting Thursday, Kohl’s is starting a curbside pickup program again at most stores.
The move is in line with other large department stores. Macy’s also announced Monday that it would furlough a “majority” of its workers.
Kohl’s ended 2019 on a flat note. The company’s sales were down 1.3% for the fiscal year with particularly weak performance in the women’s department. Kohl’s eliminated around 250 positions in a company restructuring in February.
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