Macy’s may face more temporary store closures as Covid cases climb and threaten crucial holiday shopping season, CEO says
People sit as Macys shopping bags are placed on a table at Herald Square as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on August 20, 2020 in New York City. The fourth phase allows outdoor arts and entertainment, sporting events without fans and media production.
Alexi Rosenfeld | Getty Images
Macy’s faces more temporary store closures as coronavirus cases rise rapidly across the U.S., impeding its recovery and the all-important holiday shopping season, executives said Thursday.
“Covid is surging again across the country,” CEO Jeff Gennette said Thursday during a post-earnings call with analysts. “And that continues to impede our recovery, in international tourism and urban areas. And the supply chains have opened up, yet problems remain.”
Its online business is expected to grow “at a very aggressive rate” and could expand even faster depending on whether states and cities shutter retailers again, Gennette added.
Macy’s said its flagship stores like its Herald Square location in New York City have been hit the hardest during the pandemic. The lack of tourists and office workers shopping over lunch breaks and after work has hurt traffic, he said.
One of the company’s locations at a mall in El Paso, Texas, is closed due to a surge in cases there. Mall owner Simon Property Group said earlier this month it had been asked to shut down its Cielo Vista Mall in El Paso, with Covid-19 cases in the area on the rise. The United States has regularly been logging more than 100,000 daily Covid infections in the past two weeks.
Gennette said Macy’s is monitoring other communities closely, and has a strategy to work through additional store closures. “We are getting expert at this,” he said.
Meantime, Gennette said he is optimistic consumers will be eager to get dressed up again, post-pandemic. The retailer’s sales have declined with fewer people visiting its stores for work clothes, prom dresses and wedding gowns in 2020.
“A vaccination is obviously on everybody’s mind … and I think there is going to be a surge of demand when that happens,” he said.
There will be people who “have been wearing the same clothes, lounging in active and in casual sportswear. … And they’re going to want to dress up,” Gennette said.
Macy’s shares were fell by more than 5% in early trading Thursday.
The company reported a third-quarter, same-store sales decline of more than 20%. And Macy’s said it expects its same-store sales of owned and licensed stores to decline by a low- to mid-20s percentage during the fall.
