ROCKFORD — Footwear and apparel retailer Wolverine World Wide Inc. is in the “early stages” of converting one of its manufacturing facilities to produce protective masks for health care workers.
Wolverine (NYSE: WWW) said it planned to produce the products at its ReChaco manufacturing facility, a footwear repair operation adjacent to its headquarters in Rockford, according to a statement. The company also said it had donated 25,000 protective masks to an unspecified local hospital group, with plans to provide more.
“(W)e will continue to protect the safety of our teams and partners while stepping up to serve our communities,” Chairman, CEO and President Blake Krueger said in a statement.
The company could not be reached for further information.
According to the ReChaco website, the company’s footwear repair operations were suspended under Gov. Gretchen Whitmer’s stay-home order.
In a new federal securities filings, Wolverine said that it borrowed $367 million under its revolving line of credit, which is now completely drawn down. The company expects to use the proceeds “for working capital and general corporate purposes,” according to the filing.
“The increased cash position resulting from the borrowings allows for greater financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 outbreak,” the company said in the filing.
As of today, Wolverine now has $450 million in cash on its balance sheet. The company also has capacity to borrow an additional $760 million under an existing credit facility.
Wolverine said it was taking quick proactive measures to conserve capital given the global disruptions caused by the coronavirus. That includes reducing inventory because of lower demand related to store closures in various areas, including Michigan. As well, Wolverine is delaying “most” capital projects and suspending share repurchases. The measures are expected to result in $500 million in cash savings for the balance of the year.
“We are fully operational and have proactively positioned our business to navigate through this uncertain time and emerge stronger,” Krueger said. “Our prompt liquidity measures, significant expense reductions and heightened inventory discipline are expected to allow the Company to deliver positive cash flow in 2020.”
The company did note that it experienced “mid-teens ecommerce growth” so far in the first quarter “and recent trends in this channel are very encouraging,” citing its “run, hike and walk” products, as well as its work boots. The company attributed the e-commerce growth in part to customers adjusting their lifestyles to social distancing.