MESSAGE
| DATE | 2020-11-20 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [Hangout - NYLXS] lockdowns killed Macy's, and with that,
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Macy’s CEO to States: Don’t Close Us Down Again
Suzanne Kapner
6-8 minutes
Macy’s Inc., M 2.11% still smarting from the pandemic’s damage to its
business, is lobbying states and cities not to close its department
stores during the critical holiday period because of the surge in U.S.
coronavirus cases.
New Mexico has issued a stay-at-home order and told nonessential stores
to shut their doors to customers through Nov. 30, which would include
the Black Friday sales weekend. Supermarkets and other retailers that
get more than 30% of revenue from food sales could stay open, but
big-box chains like Best Buy Co. BBY 0.90% , Hobby Lobby, Dick’s
Sporting Goods Inc. DKS 3.09% or department stores could only offer
curbside services.
Macy’s Chief Executive Officer Jeff Gennette said in an interview
Thursday that the company had demonstrated it could operate its
stores—which are large and can accommodate social distancing—safely
during the pandemic. The company, along with retail-trade groups, has
been lobbying state and local officials to ensure its stores can remain
open as Covid-19 cases rise.
“We hope we don’t get locked into a definition again of essential or
nonessential,” Mr. Gennette said.
Trade groups, including the National Retail Federation and the Retail
Industry Leaders Association, have been contacting state governors to
educate them on the steps their members have taken to make their stores
safe, such as requiring customers to wear masks, said spokesmen for the
groups.
But it is unclear how successful their efforts will be as coronavirus
cases mount. The governor of New Mexico said she ordered nonessential
businesses to close after the state set records for daily new cases,
Covid-19 hospitalizations and deaths.
“New Mexicans must stay at home to stop the spread and prevent needless
mass casualties all throughout our state,” said Gov. Michelle Lujan
Grisham, a Democrat. “This is real. This is not up for debate.”
Other essential retailers, according to the New Mexico order, include
hardware stores, automobile and bike-repair shops, laundromats and dry
cleaners. Supermarkets and other retailers that can stay open must limit
capacity to 25% occupancy or 75 people and close by 10 p.m.
The NRF has filed a public-information request to learn more about how
New Mexico policy makers decided which businesses to deem essential,
according to David French, the group’s senior vice president of
government relations.
Like other retailers, Macy’s is limiting store capacity and requiring
shoppers to wear masks, in keeping with state guidelines. It has
installed plexiglass at cash registers, and signs throughout its stores
instruct shoppers to stay 6 feet apart. Its beauty departments offer
“no-touch” consultations. Customers must use hand sanitizer before
trying on fine jewelry and watches. Only a handful of fitting rooms are
open at a given time and are sanitized frequently.
Mr. Gennette said the chain’s stores are making a gradual recovery after
closing temporarily during the pandemic’s initial surge this spring. But
he said the company’s locations in large cities like New York and
Chicago remain challenged due to fewer office workers and tourists.
For the fall quarter, Macy’s revenue fell 23% to $3.99 billion compared
with $5.17 billion a year ago. Comparable sales—which include e-commerce
and sales at stores open at least a year—fell about 20% during the
period that ended Oct. 31.
Macy’s fared worse than other retailers that reported earnings this
week, including Kohl’s Corp. , where sales declined 14%, and T.J. Maxx
parent TJX Cos. with a 3% decrease. Walmart Inc. and Target Corp. ,
which sell groceries and were able to stay open through the pandemic,
saw rising sales. Target executives said the discounter was taking
market share in apparel and other categories from other chains.
Mr. Gennette said e-commerce continues to post strong growth, with four
million new customers making a purchase on the company’s website in the
most recent period.
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The company has been closing weaker stores and focusing its investment
on its best locations. It has also been cutting expenses and corporate
jobs. The company said it would eliminate about 3,900 roles in June
after trimming 2,000 in February.
Macy’s lost $91 million in the most recent period, compared with a
profit of $2 million a year earlier. Profit margins improved as lower
inventory allowed the company to sell more items at full price.
Macy’s is girding for a holiday season unlike any other. Similar to
other retailers, the company started offering Black Friday deals in
October, instead of during Thanksgiving week, Mr. Gennette said.
“We are taking a conservative view of the fourth quarter, but I feel
good about where we stand right now,” he said on an earnings call Thursday.
Department-store chains have been especially hard-hit by the pandemic,
which has reduced spending on apparel for work and events. Neiman
Marcus, Lord & Taylor and J.C. Penney Co. filed for bankruptcy
protection this year. Penney agreed to be acquired by two big mall
owners and is closing a third of its stores. Neiman has emerged from
bankruptcy and reopened its locations. Lord & Taylor is liquidating.
Macy’s shares were up slightly in Thursday trading, changing hands
around $9 a share. The stock was down 47% this year through Wednesday’s
close.
Write to Suzanne Kapner at Suzanne.Kapner-at-wsj.com
Corrections & Amplifications
The name of the Retail Industry Leaders Association was incorrectly
given as the Retail Leaders Association in an earlier version of this
article. (Corrected on Nov. 19.)
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