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Ralph Lauren Draws Down $475 Mln From Credit Facility; Halts Share Buybacks

Luxury fashion house Ralph Lauren Corp. (RL) on Tuesday provided details of its initiatives to date in response to the COVID-19 pandemic.

As part of its efforts to maintain its financial strength, Ralph Lauren said it is reducing or delaying capital expenditures and aligning inventories to anticipated demand. The company also said it is drawing down $475 million from its global credit facility to bolster cash balances.

In addition, Ralph Lauren is halting any incremental share repurchases during the COVID-19 crisis, having completed its repurchase program in fiscal 2020. The company is also pausing all non-critical capital build-out and reviewing all real estate projects.

During the temporary closure of its North American and European distribution centers, Ralph Lauren conducted extensive deep cleanings and implemented enhanced health and safety protocols, including social distancing on-site as well as staggered work shifts and break schedules.

As the company's distribution center operations re-open on April 1, 2020, Ralph Lauren will resume normal shipping of digital and select wholesale orders.

Last week, Ralph Lauren said that its charity arm, the Ralph Lauren Corporate Foundation, it is committing $10 million towards the global response to the COVID-19 pandemic. The charity arm was formerly known as the Polo Ralph Lauren Foundation.

In addition, Ralph Lauren is starting the production of 250,000 masks and 25,000 isolation gowns for donation with its U.S. manufacturing partners.

To mitigate risk and provide its teams with enhanced resources and support amid the COVID-19 pandemic, Ralph Lauren said it has directly enlisted a medical expert from WorldClinic, Inc., to help guide its decision-making.

Measures implemented by the company include imposing temporary closure of stores and distribution centers; a global freeze on business travel; deep cleanings and sanitization across retail, distribution and corporate offices; and the activation of remote working across impacted corporate office locations.

Additionally, Ralph Lauren has provided its teams access to regularly updated resources, tools and trainings on topics including wellness and remote working. Employees worldwide also have free access to employee assistance programs that provide legal, financial, parenting, elder care, childcare and mental health support.

Ralph Lauren said that as the situation continues to unfold, it plans to provide an update on the operational and financial impacts of the COVID-19 outbreak on its fourth quarter fiscal 2020 earnings call.

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