Under Armour has borrowed $700 million through an existing line of credit to prepare for the effects of the new coronavirus pandemic on its sales of sports apparel and shoes.
The Baltimore-based manufacturer and retailer borrowed through an existing revolving credit line of $1.25 billion, according to a filing Thursday with the U.S. Securities and Exchange Commission.
The global brand said it borrowed funds from March 13 to March 20 “as a precautionary measure in order to increase its cash position and preserve liquidity given the uncertainty in global markets resulting from the COVID-19 outbreak.”
Under Armour had closed all 188 of its North American stores from March 16 through Saturday, calling the shutdown a precautionary measure to help stem the spread of the virus. Since Under Armour first closed its stores, most major U.S. retail chains also have shut down and have continued business online.
In Maryland, schools, restaurants, nonessential businesses, malls and most gathering spots have been ordered closed, with residents urged to stay home. By Thursday, the state had at least 580 confirmed cases of the virus and four deaths.
On Feb. 11 when Under Armour last reported financial results, it had said it expects sales to decline this year as the brand struggles to regain traction in its key U.S. market and feels the financial brunt of the outbreak, which at the time had caused more than 1,000 deaths in China but had not yet spread widely in the U.S., infecting fewer than a dozen people.
An Under Armour spokeswoman did not immediately have an update Thursday on plans for Under Armour stores, which include Brand House locations and outlets.
Under Armour had said earlier this month that it would continue to pay its employees through the temporary closure of stores and that it would step up sanitary measures in its corporate offices and distribution centers in the Baltimore region and around the world.
The company’s use of its credit line this month represents a material increase in its borrowing, requiring it to be publicly disclosed. Under Armour said it plans to hold the borrowed funds on its balance sheet and said it could repay or reborrow certain amounts based on market conditions, business needs and other factors.