Retailers wish you’d be back by Easter

Donald Trump wasn’t alone in hoping everyone’s lives could get back to normal by Easter weekend.
Retailers’ decisions to furlough hundreds of thousands of US retail workers underscore that store closures are set to go on for much longer than initially anticipated. Closings in many major markets around the world will remain in place through next weekend and beyond, wreaking havoc with the prime spring shopping season.
Hennes & Mauritz AB said that net sales fell by 46% in March from the year earlier. It expects a loss in its second quarter. The extended closures will now affect crucial pre-Easter shopping period, worth about $25 billion to US retailers, according to GlobalData.
While people may still indulge in filling their children’s baskets with chocolate eggs to create some holiday cheer in this difficult time, crackdowns on even the smallest of gatherings mean they won’t be planning big fancy meals, nor refreshing their bunny-and-chick-themed decorations. What’s more, consumers can’t take advantage of the long holiday weekend in much of Europe to start shopping for the latest trends for summer. That’s a blow because it kicks off the period when consumers refresh their wardrobes, home decorations and gardens for the warmer months. If temperatures soar, that can set non-food retailers fair for the coming quarter.
From there, people’s diaries would typically be chock full with weddings, graduations and parties, plenty of reasons to update one’s wardrobe. But the novel coronavirus has radically changed all of that, eliminating pretty much any reason to dress for success. It’s estimated that half of couples planning weddings in the US this year are looking to postpone them, according to data from the Wedding Report. The graduation season has been thrown into question. More than 80 US colleges and universities have either cancelled, postponed or been turned their 2020 commencement ceremonies into virtual gatherings.
That means everything from floral dresses to pastel hued shoes may have to be offloaded. Discounting to clear unwanted stock means the crisis is likely to last well into the second quarter, and possibly beyond.
There’s another reason why the impact on may be bigger than initially feared: Some online demand has evaporated. Retailers have to ensure workers processing internet orders observe strict social distancing rules. So far British online fashion group Asos Plc, which generated 13% of its sales from the US, has kept its warehouses in Atlanta, Berlin and the UK open, albeit with longer delivery times. But rival fashion chain Next Plc has stopped taking online orders while it reconfigures its distribution centres. This would be in line with its worst case scenario of the business being closed for four weeks, cutting full-year sales by $1.2 billion.
—Bloomberg

Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times