Macy’s released its preliminary earnings for the first quarter, and it ain’t pretty.
The company said it expects it lost as much as $1.1 billion between February and May, blaming its losses on lockdown measures that governments imposed because of coronavirus.
The company was forced to close stores on March 18 because of the coronavirus outbreak, causing sales to plunge by as much as 45%, the company said Thursday.
The pandemic has exposed the stark divide in the retail sector. Panic shopping has lifted big box chains such as Walmart (WMT), Target (TGT) and Lowe’s (LOW) that were deemed essential during the pandemic and stayed open.
But it has battered department and clothing stores that shut down and pushed already struggling chains like JCPenney (JCP) and Neiman Marcus into bankruptcy.
Macy’s, Kohl’s and L Brands’ results reflect how reliant traditional apparel chains are on customers coming into stores and raise doubt about their ability to survive in the long run.
“We experienced a steady uptick in our digital business in April, which was encouraging, but only partially offset the loss of sales from the stores,” CEO Jeff Gennette said in a statement.
Macy’s began reopening stores on May 4 – just a couple days after its first fiscal quarter came to a close. As of this week, it has approximately 190 Macy’s and Bloomingdale’s stores open. The company hopes to have more than 500 stores open by mid-June.
Macy’s is limiting the number of customers allowed inside stores that are reopening and installing social distancing signs and markers. Customers will be required to use hand sanitizer before trying on jewelry or watches. And Macy’s has suspended ear piercings, bra fittings and tailoring services.
The company says it’s working: “With two weeks of results from reopened stores, customer demand is moderately higher than we anticipated,” Gennette said.