Lifetime Brands is taking several actions in response to the COVID-19 pandemic and the related impact on its business.
Company officials implemented temporary cost saving initiatives that include some staff furloughs and a reduction in executive and board of directors compensation.
“Like many of our customers, suppliers and industry peers, Lifetime is facing unprecedented challenges in light of the evolving COVID-19 pandemic,” said Robert Kay, Lifetime’s CEO. “Our top priorities remain the health and safety of our employees and partners, and positioning our company to successfully navigate the economic challenges created by the pandemic. We continue to take prudent action to favorably position the business and provide a safe and secure environment in which to operate. Lifetime is fortunate that our recent business model and restructuring actions have provided us with the economic flexibility to continue to operate our business safely and efficiently as we focus on ensuring we remain well positioned to compete in the global economy.”
The company’s cost reduction measures include a reduction in non-essential operating costs and a reduction in compensation on a graduated basis for Lifetime’s senior managers, with CEO Kay and executive chairman Jeffrey Siegel voluntarily reducing their base salary by 20%. Members of Lifetime’s board of directors have each also agreed to reduce the cash portion of their annual compensation by 20%. In addition, Lifetime has furloughed a number of employees in various functions throughout the company as a precautionary measure in the event of a prolonged economic downturn.
Lifetime asserted that the company’s supply chain remains intact, bolstered by actions which have resulted in an adequate and continued supply of product. Additionally, while preliminary, its first quarter revenues appear to have remained consistent with expectations, which were in line with the prior year. The company said this was driven by a good performance mid-March and continued order flow from Lifetime’s four largest customers and its e-commerce channel, since the COVID-19 pandemic resulted in store closures for many traditional retailers due to social distancing guidelines.
Social distancing actions did result in a drop off in demand in the second half of March for those brick and mortar retailers who have closed their store operations. Lifetime expects this drop off to continue while these actions remain in place.
Lifetime also said it remains well-capitalized as it manages through the impact of the ongoing pandemic, largely due to the operational and restructuring efforts it has undertaken over the past two years and its disciplined approach to capital allocation. The board of directors also elected to push back the timing of its quarterly dividend.
The company said its board and management will continue to monitor the rapidly changing environment created by COVID-19 and will continue to take any and all necessary steps to manage the impact of the pandemic as the situation develops.