Duluth Holdings Provides Business Update Related to COVID-19
April 10 2020 - 1:02PM
Duluth Holdings Inc. (dba, Duluth Trading Company) (“Duluth
Trading”) (NASDAQ: DLTH), a lifestyle brand of men’s and women’s
casual wear, workwear and accessories, today announced additional
measures to ensure its business and financial resiliency during the
rapidly escalating impact of the COVID-19 pandemic.
“As we entered fiscal 2020, no one could have anticipated the
severe impact of COVID-19 on our citizens and country. The
retail sector deemed ‘non-essential’ has been especially hard hit
and there is no clear line-of-sight to recovery. In this
challenging time, our management and board had to make some
difficult but necessary decisions to safeguard our long-term
outlook. While I am confident in our brand and the resiliency of
our Company, we are taking additional precautions to prepare for
extended business disruption in our retail stores. We are fortunate
to have a strong online presence to provide uninterrupted and
outstanding service to our customers, as we all weather this
pandemic together,” said Steve Schlecht, Executive Chairman and
Chief Executive Officer of Duluth Trading.
As previously reported, the Company closed its stores on March
20, 2020 to protect its employees and customers. As a result,
hourly store employees were temporarily laid off and provided with
two weeks of pay. They will have the opportunity to be re-hired as
soon as the retail stores are safe to re-open in accordance with
state and local regulations. Duluth Trading continues to serve its
customers through its online business, and its distribution centers
remain fully operational. On April 6, the Company provided staff at
its distribution centers with a $2.50 hourly premium while Duluth
Trading stores remain closed.
Additional measures to ensure business and financial resiliency
include:
- Six-month pay reduction for senior leadership ranging from 10
to 20 percent.
- CEO Steve Schlecht will waive all cash compensation for the
balance of fiscal 2020.
- The Board of Directors will forego cash retainers for the
second and third quarters.
- Furloughs of varying lengths with benefits intact for 68% of
salaried staff.
- A permanent 10 percent reduction in corporate staff.
- All operating expenses are under review including price
concessions with vendors and reductions in lease expense for its
fleet of retail stores.
- To curtail capital expenditures, the Company now plans to open
four stores in fiscal year 2020, reducing its previously disclosed
plan by one store.
The Company’s liquidity position as of April 10, 2020 is $85
million outstanding on its $130 million line of credit and $13
million in cash balance.
About Duluth Trading
Duluth Trading is a rapidly growing lifestyle brand for the
Modern, Self-Reliant American. Based in Mount Horeb,
Wisconsin, we offer high quality, solution-based casual wear,
workwear and accessories for men and women who lead a hands-on
lifestyle and who value a job well-done. We provide our customers
an engaging and entertaining experience. Our marketing
incorporates humor and storytelling that conveys the uniqueness of
our products in a distinctive, fun way, and our products are sold
exclusively through our content-rich website, catalogs, and “store
like no other” retail locations. We are committed to outstanding
customer service backed by our “No Bull Guarantee” - if it’s not
right, we’ll fix it. Visit our website at
www.duluthtrading.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements, other than statements of historical facts
included in this press release, including statements concerning
Duluth Trading's plans, objectives, goals, beliefs, business
strategies, future events, business conditions, its results of
operations, financial position and its business outlook, business
trends and certain other information herein are forward-looking
statements. You can identify forward-looking statements by the use
of words such as “may,” ”might,” “will,” “should,” “expect,”
“plan,” “anticipate,” “could,” “believe,” “estimate,” “project,”
“target,” “predict,” “intend,” “future,” “budget,” “goals,”
“potential,” “continue,” “design,” “objective,” “forecasted,”
“would” and other similar expressions. The forward-looking
statements are not historical facts, and are based upon Duluth
Trading's current expectations, beliefs, estimates, and
projections, and various assumptions, many of which, by their
nature, are inherently uncertain and beyond Duluth Trading's
control. Duluth Trading's expectations, beliefs and projections are
expressed in good faith, and Duluth Trading believes there is a
reasonable basis for them. However, there can be no assurance that
management's expectations, beliefs, estimates, and projections will
be achieved and actual results may vary materially from what is
expressed in or indicated by the forward-looking statements.
Forward-looking statements are subject to risks and uncertainties
that could cause actual performance or results to differ materially
from those expressed in the forward-looking statements, including,
among others, the risks, uncertainties, and factors set forth under
Part 1, Item 1A “Risk Factors” in the Company’s Annual Report on
Form 10-K filed with the SEC on March 20, 2020, and other factors
as may be periodically described in Duluth Trading’s subsequent
filings with the SEC. Forward-looking statements speak only as of
the date the statements are made. Duluth Trading assumes no
obligation to update forward-looking statements to reflect actual
results, subsequent events or circumstances or other changes
affecting forward-looking information except to the extent required
by applicable securities laws.
Investor and Media Contact:Donni Case (310)
622-8224Margaret Boyce (310) 622-8247Duluth@finprofiles.com
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