Coronavirus drives Under Armour to furlough 6,600 US workers
Board of directors, top executives taking 25 percent paycuts
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Under Armour will furlough 6,600 employees at its U.S. stores and warehouses in a bid to stem financial losses caused by the coronavirus pandemic, the company said Friday.
The temporary layoffs will impact about 6,000 employees at Under Armour’s full-price and discount outlet stores, and about 600 workers at its U.S. distribution centers. The changes take effect on April 12.
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"In these unprecedented and challenging times, the majority of stores where Under Armour is available remain closed, contributing to a significant decline in revenue," said Under Armour President and CEO Patrik Frisk. "While we're thankful for the meaningful balance sheet improvements we've driven over the past two years and we are seeing some early signs of recovery in our APAC region, this unanticipated shock to our business has been acute, forcing us to make difficult decisions to ensure that Under Armour is positioned to participate in the eventual recovery of demand.”
Workers affected by the decision will continue to receive health benefits for two months. Under Armour’s board of directors and top executives are taking 25 percent pay cuts.
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Under Armour shares rose more than five percent in trading Friday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAA | UNDER ARMOUR INC. | 9.52 | +0.28 | +3.03% |
Aside from the furloughs, Under Armour said its stores would remain closed until further notice. Decisions on when to reopen retail locations will be made on a country by country basis and adhere to guidelines established by health officials.
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Under Armour was one of countless U.S. retailers to shutter stores as the coronavirus pandemic worsened. Authorities in many states have mandated closure of nonessential businesses and enacted social distancing protocols.
The company withdrew its first-quarter and full-year guidance for fiscal 2020 due to uncertainty related to the outbreak.
“We do not take these decisions lightly and are doing all we can to minimize the impact on our teammates during this time. Because of the strength of our brand and the steps we have taken, we will weather this storm,” Frisk added.”