The deadly coronavirus has eaten away several retailers over the past 4 months – and it just doesn’t seem to stop.
There’s a surge in cases again in the US with 3,363,056 confirmed cases and 1,35,605 deaths and the retailers are now uncertain about the future.
There’s now a surge in this fear of uncertainty too with reports that retail sector’s Q1 operating income has fallen by 58 per cent, making it one of the worst quarters since 2008 recession.
Closure of stores since March 2020, extended lockdowns and another pandemic surge over the last 2 weeks have been instrumental in bringing down operating income to as low as 58 per cent.
And if Walmart is excluded, the numbers are as bad as 71 per cent. Notably, Walmart was allowed to open to sell essential products.
Retail Metrics says it was only in Q4 2008, during the recession period, that the retail earning had slumped by 26.6 per cent Y-o-Y.
Retail Metrics provides professional investment managers, traders and analysts with continually updated monthly retail same-store sales estimates for publicly traded US retailers and their sub-divisions.
Though lots of retailers have resorted to cost-saving measures like furloughing staff or permanently shutting down stores, it isn’t working for many. Several retailers have filed for bankruptcy and Chapter 11 seems to be the ‘much used’ word in the industry today.
Some of the companies that have filed for Chapter include RTW Retailwinds, J Crew, JCPenney, Neiman-Marcus, Brooks Brothers and Lucky Brands, among several others.
Besides, there are quite a few like Ascena Retail Group who intend to file for Chapter 11 soon.