Malls, retailers struggle to survive coronavirus impact
Malls and retailers are fighting to survive amid the coronavirus pandemic as 25,000 stores have already closed in 2020. FOX Business’ Jeff Flock with more.
PVH Corp., the parent company of Calvin Klein and Tommy Hilfiger, will conduct layoffs and shut down all of its Heritage Brand outlet stores in the coming months as it looks to cut costs and reorganize its business during the coronavirus pandemic.
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A total of 162 Heritage Brand stores, which include the Van Heusen, Izod, Warner’s and Olga clothing lines, are expected to wind down operations by mid-2021, company executives said in a press release. PVH will also cut 12 percent of its corporate workforce, or about 450 positions, across its Calvin Klein, Tommy Hilfiger and Heritage Brand segments.
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The shift away from brick-and-mortar retail was announced during a pandemic that forced lengthy shutdowns of nonessential businesses in recent weeks. PVH said the job cuts and structural changes were expected to result in $80 million in annual savings.
“While these decisions are always challenging, they are strategically important for the long-term health of PVH,” said PVH President Stefan Larsson. “The COVID-19 crisis is dramatically reshaping the retail landscape in ways that we believe will be long-term in nature and far-reaching in terms of consumer purchasing behavior.”
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Last month, PVH said revenue dropped 43 percent to $1.34 billion in the three months ending in May. Stores across the company’s three segments were closed for an average of six weeks due to COVID-19.
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PVH said it expects to incur $80 million in pretax charges related to the store closures and layoffs. The charges are tied to severance packages, lease termination costs and other considerations.
“We did not take these decisions lightly, as our Heritage Brands Retail business is our oldest retail business yet no longer met appropriate return metrics,” PVH Chairman and CEO Manny Chirico said. “We would like to express our deepest gratitude to all of our impacted associates for their support, loyalty and contributions over the years.”
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