Citi Trends Provides Additional Business Update in Response to COVID-19 Outbreak

Staff Report From Savannah CEO

Thursday, April 2nd, 2020

Citi Trends, Inc. provided a further update on the actions it is taking in response to the outbreak of the coronavirus (COVID-19).

In light of federal, state and local regulations and the guidance of health authorities to close nonessential businesses, the Company has extended its previously announced temporary closure of all of its retail stores, distribution centers and New York office until further notice. The Savannah corporate office will also be temporarily closed for all but minimum basic operations. The Company will continue to monitor the guidance provided by government and health authorities to determine the appropriate time to reopen its stores, distribution centers and offices.

“Our guiding principle is that we will continue to prioritize the health and safety of our associates, customers and the communities we serve,” said David Makuen, Citi Trends’ Chief Executive Officer.

As a result of a significant interruption in business operations, the Company announced that it has placed on furlough substantially all of its store and distribution center personnel, as well as about 40% of its corporate staff. The Company will pay for the first 30 days of medical benefits for covered associates during the furlough, and assist all associates with information about available resources. Additionally, the Company has temporarily reduced the cash compensation of its CEO and Board members by 25% and temporarily reduced the cash compensation of its senior executives by 15% to 20%. These steps, together with the Company’s previously announced reductions in operating expenses, capital expenditures and inventories, as well as the Company’s utilization of its credit facility, are a continuation of the aggressive and prudent actions the Company is taking to preserve cash and remain resilient during this unprecedented period.

Mr. Makuen added, “This furlough was a very difficult decision knowing that good people would be affected; however, we felt it was a necessary step to ensure the long-term viability of our Company and the livelihood it provides to our associates. We will continue to pursue all responsible actions to strengthen our financial position and preserve liquidity, and we will make every effort to bring our associates back to work as soon as possible. We look forward to reopening our stores in the future so we can all go back to doing what we do best, which is serving our customers.”