Retailers announced a new round of store closures early this week as the industry scrambles to shut out the pandemic rocking the international community.
In what is quickly becoming table stakes for brands across North America, many stores and retailers are closing their doors for two weeks or more.
That’s going to halt revenue for these brands in the short term, leading to a “very bad” March and April, Ray Wimer, assistant professor of retail practice at Syracuse University’s Martin J. Whitman School of Management, said Tuesday.
“Retailers in categories such as apparel, that fit into the ‘wants,’ not ‘needs,’ are going to have a very rough time,” he added.
Macy’s Inc., which owns Macy’s, Bloomingdale’s, Bluemercury and a number of off-price channels, will shut its doors on Tuesday, and will not reopen until April 1 at the earliest.
“We will work with government and health officials to assess when we will reopen our stores and safely bring our colleagues back to work,” Jeff Gennette, chairman and chief executive officer of Macy’s, Inc., said in a statement.
The company will provide benefits and compensation to its impacted workforce throughout the closures, Gennette added, a move replicated to some degree by most affected retailers.
American Eagle Outfitters, Express and Crocs all stated Tuesday that they would close all owned and operated stores through at least March 27, all also stating a commitment to pay employees during that time.
Express went a step further in withdrawing its first-quarter guidance, which was issued on March 11. The company said in a statement that it would not be providing an updated outlook at this time.
“The COVID-19 situation has evolved considerably since our earnings call last week, and while we remain committed to returning Express to long-term… we must acknowledge that this is certainly a detour,” Tim Baxter, the company’s CEO, said. “We are taking decisive and appropriate action to further reduce capital expenditure and expenses.”
Luxury firm Tapestry Inc.—owner of Coach, Kate Spade and Stuart Weitzman—will also shut down its retail operations across North American and Europe until through at least March 27. The firm warned that its adjusted fiscal 2020 guidance, which was released on February 6, did not incorporate projections based on coronavirus outbreak impact beyond China.
Ascena Retail Group, which owns Ann Taylor, Loft, and Lou & Grey, along with size-inclusive brands like Lane Bryant and others, will close its stores through March 28. Tailored Brands, which owns Men’s Wearhouse and Jos. A. Bank, will also close its locations through that date.
Victoria’s Secret and Bath and Body Works owner L Brands announced Tuesday that it would shut its doors across North America through March 29, and Vince Holding Corp., owner of Vince, Rebecca Taylor and Parker brands, will do the same. Both firms will continue to provide store employees with wages and benefits.
Toronto-based Canada Goose said it would close all retail stores across North America and Europe until at least March 31, though stores in Greater China remain open. The company’s partner-operated Tokyo location will operate on a reduced schedule, the brand said in a statement.
New York specialty athletic retailer Foot Locker will shut down not only its North American stores, but locations across Europe, the Middle East, Africa and Malaysia through March 31. The company’s stores in the rest of the Asia Pacific region, including Hong Kong, Singapore, Australia and New Zealand, will remain open until they receive further directives from local officials.
All-American brand Ralph Lauren said it would close all of its stores across North America through April 1. The company’s impacted employees will receive their standard pay for the full two weeks, the brand said in a statement Tuesday.
New York City’s famed Shops and Restaurants at Hudson Yards shopping center will close indefinitely, the group said in a statement on Tuesday afternoon.
In spite of the season’s unanticipated setbacks, kids’ retailer The Children’s Place, which also owns Gymboree, released its favorable Q4 results on Tuesday. Jane Elfers, the company’s president and CEO, said The Children’s Place has taken preventative measures across all stores in the U.S. and Canada through a combination of store closures and reduced hours based on direction from local government officials and health authorities.
Meanwhile, some brands and retailers are opting to stay open with reduced hours of operation.
J.C. Penney said Tuesday that it would remain open from Monday through Saturday from noon to 7 p.m., as well as Sunday from 11 a.m. to 6 p.m. Kohl’s will implement temporary everyday store hours, from 11 a.m. to 7 p.m., “to ensure that all stores are well-staffed and cleaned during peak times,” the company said in a statement.
Meanwhile, big-box retailer Target has been a lifeline for shoppers looking for necessities as well as a retail fix during a time of increased stress.
Beginning Wednesday, Target stores will be closing by 9 p.m. each evening to provide store teams with additional time for cleaning and restocking. Additionally, Target will be introducing a dedicated shopping hour every Wednesday morning for vulnerable guests, similar to Dollar General’s recently announced senior shopping hour.
“Families are counting on Target for critical supplies during this challenging time, and we’ll continue to do all that we can to keep our stores open,” Brian Cornell, the company’s chairman and CEO, said.
“For weeks, we’ve been responding to the impact of the coronavirus by taking care of our team, rigorously cleaning our stores and helping our guests find the food, medicine and other essentials they need for themselves and their families,” he added.
The retailer will also maintain limits on select products, and has asked guests to only purchase what they need in order to accommodate increased demand for certain items like cleaning supplies.
“The impact on retail is going to be a two-sided coin,” Syracuse University’s professor Wimer said, adding that grocers, drug stores and pharmacies stand to increase their revenues in the coming weeks.
Stores like Target, which offer a multitude of products ranging from food to home appliances and clothing, are likely to benefit from this surge should they be able to keep up with demand.
“This is likely to extend out to Amazon and other online retailers that are also selling necessities,” Wimer added, citing the online marketplace’s recent announcement it would be hiring 100,000 more workers to help keep up with the deluge of orders.
The spring selling season may prove to be a wash for many brands, Wimer said.
“We should see retail spending bounce back in the fall and winter, although it is not likely to cover the lost revenue this spring and early summer,” he added.