The Estée Lauder Cos. Inc. has borrowed $1.3 billion on its $1.5 billion revolving credit facility as it looks to “enhance its financial flexibility and liquidity” during the ongoing coronavirus pandemic.
The beauty company already had $200 million outstanding on the loan. Lauder has also suspended purchases of Class A common stock, and says it believes it now has “sufficient liquidity” in order to operate during COVID-19.
Lauder is still up and running, but things are different now, the company said in a filing with the U.S. Securities and Exchange Commission on Tuesday. Lauder has modified business practices, including closing nonessential operations, and has seen many of its retail partners close. Travel retail, a driving force for the business over the past couple of years, has also taken a big hit as “air travel continues to be largely curtailed,” the company said.
Asia is becoming a bright spot again, Lauder said, as stores have started to reopen. Online sales are also growing, the company said. Lauder is also one of the beauty brands stepping up to make hand sanitizer, and has reopened its Melville, N.Y., plant in order to make sanitizer for medical staff.
Beauty companies big and small have had to weigh financial options in order to shore up their businesses as the COVID-19 pandemic persists. Earlier in April, Edgewell Personal Care said it had entered into an agreement for a $425 million secured credit facility, replacing a facility that was scheduled to mature in June, in order to increase flexibility in uncertain times.
Small companies, too, have been exploring their options, including loans from the Small Business Administration or relief under the Paycheck Protection Program.
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