In a familiar theme for omnichannel retailers who have gotten ahead of the curve in digital transformation, Macy’s reported store sales down 61% in the second quarter, while ecommerce increased 53%. Still brick-and-mortar news was not all bad, as stores reopened stronger than expected and luxury goods outpaced projections.
Shortly after J.C. Penney filed Chapter 11, Amazon reportedly was in talks about possibly picking up the troubled store chain on the cheap. The plan calls closing 242 of 846 stores by 2021, setting up a real estate investment trust (REIT) to handle the balance of its physical assets and receiving $900 million in debtor-in-possession financing.
Retail was a mixed bag this week, as over a dozen states have begun to slowly reopen, working to come out the other side of the COVID-19 shutdown. Some retailers and malls are doing the same, hoping that enough returning shoppers and their pent-up demand for goods will help with massive cash flow and viability challenges.
Similar to XPO Logistics’ decision to postpone its exploration of divesting assets due to current market uncertainty caused by coronavirus, a bankruptcy court judge has granted a 45-day stay on the Chapter 11 filing of sporting goods retailer Modell’s due to the ongoing crisis and its impact on closing sales.
The coronavirus outbreak is continuing to wreak havoc on retail, with the impact going beyond store shutdowns to online business being shuttered. Companies that closed their ecommerce operations in recent days include fashion brands Reformation, Marysia and The Frankie Shop, and retailers TJ Maxx, Marshalls and HomeGoods.
The National Retail Federation and the International Council of Shopping Centers are asking the Trump administration and the federal government for relief for members who are being hard hit by the coronavirus crisis, much as are other industries such as airlines and hospitality, as mall, store and restaurant closures grow.
Macy’s Inc. announced plans to close 125 stores within three years in an effort to find profitability amid an ongoing shopper flight from malls and department stores, while consolidating its headquarters in New York and cutting 2,000 corporate jobs. This will leave 400 Macy’s stores in place; about 30 will close in 2020.
Pier 1 Imports said it plans to close up to 450 stores, nearly half of its 942 locations, reduce headcount and shutter some distribution centers along with other expense reductions as the company is reportedly weighing bankruptcy. The company reported a 11.4% drop in same-store sales and a 13.3% drop in net sales in Q3.
Just a month into the job from Target, new Bed Bath & Beyond CEO Mark Tritton has let go six executives as part of a major shakeup at the struggling home goods retailer after years of negative results. Tritton saw great success as chief merchandising officer at Target, launching private label brands, some now north of $1 billion.