Lululemon announced that it will pay all its workers till 1 June irrespective of stores are open or not in the wake of Coronavirus pandemic.
Notably, it has also cleared its rental dues for April.
The athletic apparel maker ended 2019 with US $ 1.1 billion in cash on hand. Also, the company has no plans to draw down its credit revolver, but has temporarily held its share buyback programme.
However, Lululemon’s senior leadership team will take a 20 per cent pay cut for the next 3 months, and its Board of Directors will relinquish their cash retainers.
As the retailer stated its fourth-quarter earnings it chose not to provide a full-year outlook because of the very obvious reasons. Same-store sales overall were up 20 per cent during the holiday quarter and digital sales hiked 41 per cent.
Its shares are plummeting about 20 per cent for current year with a market cap of roughly US $ 24.1 billion.
Lululemon closed majority of its stores in China for almost 2 weeks, but they have all opened now, while its stores located in US and Canada shall be closed for a much longer period of time.
This will create more demand and correspondingly, the consumers will get back to their normal behaviour quicker. Many people are shopping online which signals towards the ‘new reality of retail.’
McDonald, CEO, Lululemon, remarked “The length of the closing[s] is going to be a big determining factor in how retail will look coming out.”