Dansko Update 05.05.2020
Dansko Team,
There is no way to
sugarcoat this difficult message: We are ending one of the toughest days in
Dansko’s history as we have reduced our workforce by 13 friends and colleagues
and asked others to take on new roles with reduced compensation. I do not take
the responsibility for these decisions lightly and we are all deeply saddened
and disappointed at this outcome.
We took a set of
measures at the beginning of April, including salary reductions and deferrals,
reduced workweek hours, and furloughs, among other expense reductions and
payment deferrals to help Dansko manage through the short-term uncertainty. As we
approached the end of April, however, it became very clear that the negative
impact of the pandemic would be more severe than that for which we had
originally planned.
Unfortunately,
being Dansko or being an ESOP does not make us immune from market forces and
overall economic conditions. We have already seen the significant effects of
reduced consumer demand and store closures. We will continue to see the
substantial economic aftershocks of the pandemic, including lost jobs and
income, retail locations that will not reopen, and distressed retailers
requesting discounts and margin assistance.
Our goal remains
the same – to manage Dansko for long-term sustainability. The harsh reality is
that Dansko cannot support our 2019 level of employees with the significantly
reduced revenue projected for 2020 and the uncertain level of growth for 2021.
Based on assumptions for the remainder of 2020 and modest growth targets for
2021, we have revised our organizational structure accordingly. My plan is to
review these assumptions, which include no 2020 year-end bonuses, in more
detail via small group calls with everyone over the next two weeks.
While there are no
guarantees given the high level of uncertainty, we have modified the
organizational structure such that Dansko can be a healthy business at reduced
revenue levels for 2020 and 2021. “Healthy” means not just in terms of
financial expectations, but also in terms of the potential to provide a
positive working environment and take advantage of future growth opportunities.
I deeply regret that this organizational structure is not large enough to
support Dansko’s prior level of employment.
I understand we
will all need some time to process today’s events. I ask that you please
exercise discretion and understanding with regard to our former Dansko
teammates and that you provide support and encouragement to our team as we move
forward. We appreciate your continued flexibility as we all adjust to the new
and changing environment.
Thanks,
Jim
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