PVH’s debt bill from the coronavirus pandemic is piling up, and it’s found a way to offset these skyrocketing expenses.
Continuing to maneuver its finances during the coronavirus crisis, PVH Corp. has commenced a euro private offering of 3 ⅝ percent senior notes due 2024 to fund general corporate purposes, including repayment of outstanding indebtedness.
The notes will be treated as a single series with the existing 3 ⅝ percent senior notes due 2024 outstanding in the aggregate principal amount of 350 million euros ($380 million) that were issued by the company on June 20, 2016. The notes will be general unsecured senior obligations of the PVH Corp. and will rank equally with all of the company’s other senior unsecured indebtedness.
The notes are being offered in a private offering to persons reasonably believed to be qualified institutional buyers in the U.S. and to certain persons outside of the U.S. They will not be registered under the Securities Act, or the securities laws of any state, and may not be offered or sold in the U.S. without registration or an applicable exemption from the registration requirements. Completion of the offering is subject to market and other conditions.
Earlier this month, the company took several steps to preserving liquidity in the midst of the coronavirus pandemic and resulting financial crisis. It drew down $750 million from its more than $1 billion revolving credit facility to add to cash balances, while maintaining untapped capital through its revolving credit facility. The company suspended share repurchases under the stock repurchase program and suspending its cash dividend beginning with the second quarter of 2020.
The company also said it was reviewing “every opportunity to eliminate discretionary operating expenses, while reducing capital expenditures to approximately $190 million from $345 million in 2019.”
At the same time, the company suspended board of directors compensation, and reduced executive compensation, including chairman and CEO Manny Chirico forgoing his salary while the crisis continues. Additionally, approximately 250 senior leaders and executives globally will experience salary reductions of up to 50 percent. In North America, which has the highest concentration of the company’s workforce, PVH has furloughed or reduced hours for approximately 75 percent of store, office and warehouse associates.
PVH Corp.’s brand portfolio includes the Calvin Klein, Tommy Hilfiger, Van Heusen, Izod, Arrow, Warner’s, Olga and Geoffrey Beene brands. The company had $9.9 billion in annual revenue in its most recent fiscal year.