U.S. Retail Industry Under Coronavirus
The coronavirus pandemic has caused turmoil throughout the retail industry. A handful of retail companies that were deemed essential from the output have seen sales increase, but many chains and franchises have been left in shambles (even with online shopping sales rising).
Over the last few weeks, several major chains have announced permanent store closings or intentions to file for bankruptcy. Here’s a look into the impact the coronavirus has had on the retail industry, which already was largely on the defense before the pandemic hit.
- Amazon
Amazon has continued its online retail domination. The company reported its first-quarter sales increased by 26% compared to 2019.
- Gap
Gap Inc. reported first-quarter fiscal year sales dropped by 43%, due to temporary store closures. As of June 4, 55% of the company’s U.S. stores are open.
- JCPenney
JCPenney will permanently close 154 stores after filing for bankruptcy.
Liquidation sales for the first round of store closures are expected to begin this month and take 10-to-16 weeks to complete.
- Macy’s
Macy’s expects a loss of up to $1.1 billion for the period ending May 2, compared to $203 million in 2019, according to its first-quarter preliminary results.
- Starbucks
Coffee giant Starbucks announced it will close up to 400 company-operated stores over the next 18 months.
Starbucks said it expects to lose up to $3.2 billion in revenue due to the coronavirus pandemic, and the closures are to “strategically optimize our portfolio.?BR>
- Victoria’s Secret
Victoria’s Secret will permanently close about 250 stores in the U.S. and Canada this year.
- Walmart
The discount retailer experienced a 10% increase in sales compared to 2019 for its first-quarter results, ending May 1.
Walmart said its e-commerce sales increased 74% in the United States.
- Zara
Inditex, the parent company of fashion brand Zara, announced this week plans to close up to 1,200 stores worldwide by the end of 2021.
The closings will be “stores at the end of their useful life?and “whose sales can be recovered in nearby stores and online," the company said.
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