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Nordstrom, Levi’s, Target and Columbia Make COVID-19 Money Moves

Brands and retailers continue to take measures to strengthen their financial position in reaction to store closings and steep falloffs in sales due to the coronavirus pandemic. Some actions are designed to improve immediate credit and liquidity, while others focus on longer-term financial positioning.

Columbia Sportswear

Columbia Sportswear Company has taken steps to reduce capital outflows. After paying the regular quarterly cash dividend in March, the company’s board of directors temporarily suspended it.

In addition, Columbia has suspended share repurchases and meaningfully reduced planned capital expenditures. Prior to suspending share repurchases in March, the company had repurchased 1.56 million shares of common stock year-to-date for $132.9 million, pursuant to a previously established written trading plan. Actions have also been implemented to improve liquidity with a focus on reducing planned inventory production for the Fall 2020 season in anticipation of lower consumer demand due to ongoing effects from the pandemic.

Columbia has also initiated a number of cost containment measures across the organization. Among the first steps were that Tim Boyle reduced his annual salary to $10,000 to allow for continuing coverage of standard health care benefits, continuing independent board of directors compensation was reduced 50 percent through January and director-level and above employees’ annual salaries were temporarily reduced between 5 percent and 15 percent to reflect leadership’s commitment to focus available funds on business needs and employees.

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After compensating retail employees’ regular wages for four weeks under Columbia’s Catastrophic Paid Leave program, U.S. retail operations staff were recently transitioned to a partial furlough program through May 1. Similar Catastrophic Paid Leave and furlough programs have been implemented within distribution centers and corporate offices. Other cost-containment measures have included minimizing discretionary expenditures, curtailed hiring and reductions in overall staff.

The company has taken a number of actions over the past few weeks to provide greater financial flexibility and liquidity. These actions include amending and restating its domestic credit agreement to provide a committed $125 million revolving A loan through Aug. 1 and a new committed $400 million revolving B loan through April 13, 2021.

The company has drawn $325 million under its domestic credit agreement since March 27, leaving $200 million in committed capacity remaining under the agreement. The amended and restated domestic credit agreement also provides for an uncommitted $100 million incremental facility, which will be added to the revolving B loan if it is executed on.

In addition to actions taken with its domestic facility, the company has drawn approximately $50 million on international uncommitted credit lines totaling approximately $106 million. Taken altogether, Columbia’s available committed and uncommitted credit lines provide $631 million of borrowing capacity of which $375 million is drawn as of April 15.

Given the ongoing business disruption and uncertainty surrounding the COVID-19 pandemic, Columbia is withdrawing its first half and full year 2020 financial outlook. It will provide an update as to the impacts of the COVID-19 pandemic on its first quarter earnings conference call scheduled for April 30.

“While it is impossible to predict how long this crisis will last, we entered into it in a position of strength and our objective is to carefully navigate this environment to ensure the company’s long-term success,” chairman, president and CEO Tim Boyle said.

Boyle said the vast majority of Columbia’s stores in China and South Korea have reopened, although many still operate with reduced store hours. In these markets, retail traffic trends have been improving, but remain well below pre-pandemic levels.

Japan had experienced a similar recovery trend to the rest of Asia until recent weeks, when a spike of new cases in and around Tokyo prompted an increase in store closures. Across North America and Europe, the company’s stores remain closed. A timeline for reopening will be based on guidance from federal, state and local governments and relevant public health authorities.

In addition to the company’s owned stores, most of our retailer partners’ stores across North America and Europe also remain closed. Its e-commerce businesses have largely remained operational during this period, with the exception of temporary distribution closures in France and China that have since resumed operations.

Levi Strauss

Levi Strauss & Co. announced that it is commencing a private placement of $300 million aggregate principal amount 5 percent senior notes due 2025.  The notes will be treated as a single series, with the 5 percent senior notes due 2025 outstanding in the aggregate principal amount of $500 million that were issued by the company on April 27, 2015.

The 5 percent senior notes due 2025 will be general unsecured senior obligations of the company and will rank equally with all of the company’s other senior unsecured indebtedness. The company intends to use the net proceeds from the offering for general corporate purposes and to pay fees and expenses related to the offering.

Shoe Carnival

Shoe Carnival Inc. has exercised the accordion feature of its credit agreement with Wells Fargo Bank N.A. and Fifth Third Bank, National Association to further enhance its financial liquidity position. The exercise, which closed on April 16, resulted in an increase of the company’s line of credit to $100 million from $50 million. The company currently has no cash borrowings under the facility.

“As we have communicated, our strong financial position has been a key competitive advantage for us through various cycles,” Cliff Sifford, Shoe Carnival’s vice chairman and CEO, said. “However, out of an abundance of caution in light of the prolonged uncertainty in the macro-economic environment driven by the COVID-19 pandemic, we expanded our line of credit to ensure greater flexibility as we navigate current market conditions.”

Shoe Carnival operates 390 stores in 35 states and Puerto Rico, and offers online shopping at

Target Corp.

Target Corp. said Thursday that on April 10, it entered into a 364-day credit agreement with certain lenders–Bank of America N.A. as administrative agent, Goldman Sachs Bank USA as documentation agent, and Citibank, N.A. and U.S. Bank National Association as syndication agents, for a $900 million unsecured revolving credit facility.

The credit agreement will expire on April 9, 2021. The credit agreement contains a financial covenant regarding the leverage ratio of Target and its subsidiaries.


Nordstrom Inc. announced the amendment of its $800 million revolving line of credit and the closing of its 8.75 percent secured debt offering of $600 million on Thursday. The company said these actions provide additional liquidity and flexibility in response to uncertainty related to the novel coronavirus.

Under the terms of the amendment, the revolving line of credit will be secured primarily by the company’s inventory during periods when its leverage ratio (adjusted debt to EBITDAR) exceeds four times or its credit ratings drop below investment grade. During this period, minimum liquidity thresholds will be applied.

Nordstrom has taken several actions to date to increase its cash position and preserve financial flexibility. This included exiting fiscal 2019 with $850 million in cash, drawing down $800 million on its revolving line of credit and issuing $600 million in secured debt financing.

The company has also suspended quarterly cash dividends and share repurchases and executing further reductions of more than $500 million in operating expenses, capital expenditures and working capital, including ongoing efforts to realign inventory to sales trends

“The actions we are taking are to position ourselves best for our employees, customers and shareholders. This includes proactive steps to strengthen our financial flexibility, including our recent debt offering,” Anne Bramman, chief financial officer, said. “These measures will provide Nordstrom with additional liquidity and flexibility not just for the short-term but over the longer term as we emerge from this unprecedented time.”