The Kathmandu Holdings Ltd (ASX: KMD) share price will be on watch on Friday after it became the latest retailer to temporarily close down its stores because of COVID-19.
It joins the likes of Accent Group Ltd (ASX: AX1), Lovisa Holdings Ltd (ASX: LOV) and Premier Investments Limited (ASX: PMV) which have taken the same action this week.
What did other retailers announce?
On Thursday Accent Group revealed that it is closing its stores, which include HYPEDC, Athlete's Foot, and Platypus, from 5pm on Friday.
Fast fashion jewellery retailer Lovisa announced that it closed its stores on Thursday. This includes all global stores except for those in the Singapore market.
And yesterday, Premier Investments, the owner of brands such as Peter Alexander and Smiggle, advised that it will temporarily close all retail stores in Australia from March 26 until April 22. This followed similar decisions the company was forced to take in New Zealand, the United Kingdom, and Republic of Ireland.
What about Kathmandu?
This morning Kathmandu revealed that it will close all its Australian stores by 5pm on Friday. This follows the recent closure of its New Zealand store network.
Management advised that this reflects the need to ensure the health and safety of staff and customers, the rapidly declining footfall, and social distancing measures that have been imposed.
Online retail in Australia, Europe, and the USA continues. However, in accordance with guidance from the New Zealand Government, online distribution in New Zealand has been suspended.
What now?
The company advised that it is taking decisive and immediate action on significant cost savings and structural cost reductions. This will be aided by government contributions and supplements to employee incomes where available.
In addition to this, aggressive cost saving initiatives have or will be implemented to manage its expenses and cashflow in line with its sales performance. This includes negotiations with landlords and the deferral of capital expenditures.
Unfortunately for shareholders, Kathmandu has followed the lead of many other companies and is suspending dividend payments until normal trading conditions resume.
Kathmandu CEO Xavier Simonet commented: "Our total focus is to protect the health and wellbeing of our teams and customers and ensure business continuity. I am so grateful to all our teams around the world for their resilience in this situation of uncertainty and challenges."
