Urban Outfitters owners to borrow $220 million to protect business
Urban Outfitter owners URBN today announced it will take measures to protect the financial position of the business, including temporarily closed stores remaining closed until further notice.
Richard A. Hayne, Chief Executive Officer, URBN said: “The global spread of COVID-19 is affecting every one of us and is certainly impacting URBN, as well. Our efforts, as a company, have been directed at mitigating the risk to our employees and customers while trying to maintain some business so we can continue to support and pay our workers.”
The company is taking many additional measures to protect their financial position and increase financial flexibility, including eliminating bonuses for FY21 and delaying all merit raises.
URBN also intends to borrow $220 million to protect cash reserves and reduce the company's capital budget by over $100 million by delaying or cancelling projects.
Since 14 March, URBN has provided ongoing pay and benefits to all store and home office employees impacted by the temporary closures. As a result of store closures and lower overall demand, the company are furloughing a substantial number of store, wholesale and home office employees for 60 days beginning today. Impacted employees will continue to receive enrolled benefits during the furlough period.
“This is the first time in our 50-year history we have furloughed employees. It’s a painful decision that we do reluctantly. We understand the above measures are extreme, but they are unavoidable. While our company is strong and our long-term future is bright, we must take these proactive steps now to ensure the greatest degree of financial flexibility to best protect our employees, customers and shareholders,” added Hayne.