Ten days ago, L Brands (NYSE:LB) announced that in response to the growing threat of the coronavirus pandemic, it would "temporarily close all Bath & Body Works, Victoria's Secret and PINK stores in the United States and Canada, effective March 17 through March 29, 2020."
Now, it's clear the situation has gotten even more serious.
Citing "the continued spread of COVID-19 and stay-at-home orders by government officials across the country," and recognizing that management can't predict when the situation will start to improve, on Friday, L Brands announced that it was extending the closure of its stores indefinitely.
In the meantime, L Brands is tapping its $950 million revolving credit facility for the funds to stay solvent. To further conserve cash, it is suspending its dividend as of the second quarter of its fiscal 2020, and will also make a "substantial reduction" in capital spending and other expenditures.
In particular, company executives at the senior vice president level and above will take 20% reductions in their base compensation, cash bonuses will be deferred, and CEO Leslie H. Wexner and other members of the board will take no cash salary at all.
Employees who aren't working to support the online businesses or who can't do their jobs from home will be furloughed effective April 5 and until further notice. Although they won't receive paychecks, they will keep their healthcare benefits.
L Brands stock closed trading Friday down 4.3%.