By Suzanne Kapner and Sarah Nassauer
U.S. clothing and mall retailers from Abercrombie & Fitch
Co. to Nike Inc. are closing thousands of stores across the country
for two weeks, unprecedented moves to stem the spread of the new
coronavirus.
On Sunday, the companies said they would temporarily shut their
U.S. shops but continue paying their store workers and taking
online orders. The list included sportswear makers like Lululemon
Athletica Inc. and Under Armour Inc., as well as the owners of
popular chains like Urban Outfitters, Hollister and Lush
Cosmetics.
Grocers and other chains that sell foods, medicines and
household essentials have promised to stay open and restock as
people race to fill pantries and refrigerators. Walmart Inc. and
grocers Kroger Co. and Publix said they will limit overnight hours
for cleanings and restocking shelves.
"We're all committed to making sure we're keeping our stores
open to serve the American consumer who's rapidly stocking up on
household essentials," Target Inc. Chief Executive Brian Cornell
said at a White House news conference Friday. The company is
"making sure we run safe stores and creating an environment that is
safe for our team members."
Normal life ground toward a halt under pressure from the
coronavirus pandemic on Sunday, as tighter restrictions by
governments put further constraints on travel, shopping and even
religious services. The virus has infected more than 156,000 people
and killed more than 5,800 since emerging late last year in China,
according to data compiled by Johns Hopkins University.
On Saturday, Apple Inc. said all of its stores outside Greater
China would be closed until March 27 in light of the worsening
spread of the virus. Apple stores in China were open Saturday, a
sign of how the threat of the epidemic has shifted. Apple said a
retail employee at its Santa Monica, Calif., store tested positive
for the virus.
Walmart said its 4,700 U.S. stores would stay open but close
overnight to help the company clean and disinfect surfaces.
Previously, about 2,200 of its U.S. stores were open 24 hours. The
company last week said a worker in a Kentucky store tested
positive.
Products are moving through the supply chain and making their
way to stores, Walmart said this weekend; store managers, however,
may limit sales quantities on items in unusually high demand.
Walmart said its hourly employees will continue to work their day
and evening shifts.
Target, which has about 1,800 stores, has also placed quantity
limits on some items and paused its next-day delivery and
express-shipping services, which were overwhelmed by demand. The
company has shifted staff to help fulfill online orders that
customers pick up at stores or in store parking lots, a spokesman
said.
Target and other large retailers have invested heavily in recent
years to offer shoppers more ways to buy online for delivery or
store pickup. The capacity of those services are now being tested
as shoppers flock to stores and websites to buy household goods and
as more organizations ask workers to stay home.
U.S. grocers aren't keeping up with customers who are emptying
their shelves amid angst over the new coronavirus. Even Amazon.com
Inc.'s Prime Now service warned customers that it had limited
availability and delivery options for some items because of
increased demand.
At the same time, there is less urgency to buy clothing or
nonessential items. "Depending on how long this lasts, the economic
impact could be enormous," said Allen Questrom, former chief
executive of J.C. Penney Co., Neiman Marcus Group Ltd. and other
retailers.
Analysts said most chains could endure a two-week shutdown but
prolonged closures or drop in store visits would strain mall-based
stores and department stores. Some cautioned that e-commerce sales
are unlikely to fill the void, since many retailers get 75% of
their revenue from their stores.
"We see mall traffic down over 50%-75% over the coming weeks and
don't anticipate much transfer to online purchases as consumers are
currently too worried about finding toilet paper in the
supermarket," analysts at Jefferies wrote in a research note, which
warned that malls were likely to become ghost towns.
Urban Outfitters Inc., which has 625 locations including the
Anthropologie and Free People brands, said it would close stores
for two weeks. "Store associates will be paid during this shutdown
and we'll continue to ship online orders," the company's chief
digital officer, David Hayne, said in a tweet. "Big step but a
necessary one."
Abercrombie & Fitch Co. said Sunday it will close all of its
stores in North America and the European, Middle East and Africa
regions. The stores will remain closed until March 28. Stores in
the Asia-Pacific region are open. All Abercrombie & Fitch store
associates will continue to be paid.
Abercrombie CEO Fran Horowitz said the company expects to
continue filling e-commerce orders. It also withdrew its guidance
for the current quarter and the full fiscal year but said it
expects "material adverse impacts" from the virus. The company
operates more than 880 stores world-wide under its Abercrombie and
Hollister brands.
Nike Inc. said it was closing stores in the U.S., Canada,
Western Europe, Australia and New Zealand to protect its employees
and consumers. The stores will close from March 16 to March 27, but
the sportswear maker will accept online orders. Nike-owned stores
in South Korea, Japan, most of China and other countries are
open.
Outdoor-gear retailer Patagonia on Saturday said it would shut
its stores, offices and operations for at least two weeks and will
reassess that March 27. Employees will receive their regular pay,
the company said.
Small startups that sell mainly online but have retail locations
are also shutting their physical stores, including apparel-rental
business Rent the Runway and cosmetics seller Glossier.
Craig Johnson, president of consulting firm Customer Growth
Partners, said that if the virus is resolved by April, he expects
retail sales to grow 4.1% this year. But if the virus lingers into
June, that forecast could be cut in half.
Khadeeja Safdar contributed to this article.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Sarah
Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
March 15, 2020 17:39 ET (21:39 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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