Coronavirus closures give a huge boost to Walmart and Target, while sales collapse at Macy's, Ross and Victoria's Secret.
U.S. retailers have laid bare the consequences of being deemed “essential” in the COVID-19 pandemic, as sales surged at those allowed to stay open but collapsed at department stores, clothing chains and other outlets forced to fall back on their online operations.
“You’ve got a whole slew of retailers whose sales were already slow, and they happened to be nonessential,” said Ken Perkins, head of the research group Retail Metrics. “As if things weren’t trending away from them, this just accelerated it.”Macy’s warned it was set for a $1-billion quarterly operating loss after the closure of all its approximately 775 stores, including the Bloomingdale’s chain, caused a “precipitous decline” in revenues.
Foot Locker on Friday said more than half its 3,100 stores around the world — most of which are in shopping malls — were still closed, as the New York-based company reported a first-quarter net loss of $98 million and a 43% drop in sales to $1.18 billion.In a sign that some of the effects of the crisis will be lasting, L Brands laid down plans this week to permanently shut 250 Victoria’s Secret stores across North America over the next several months.
The latest retailer to report a sales jump was BJ’s Wholesale Club, which has more than 200 membership outlets in the eastern U.S. Lee Delaney, chief executive, said BJ’s had become a “one-stop destination,” helping total revenues leap 21% in the quarter to $3.8 billion. Operating income more than doubled to $144 million.Declarations by U.S.
While department store chains and other companies with out-of-favor formats had been floundering long before the outbreak, chains such as Walmart have coped with the rise of e-commerce far better thanks to a mix of convenience and low prices in stores, as well as investments in online operations.“The divide has really grown,” said Perkins. “It will be interesting to see whether the divide closes as the economy reopens, but it’s unlikely that it’s going to narrow drastically.
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