FROM THE DESK OF DEBORAH WEINSWIG

Physical Retail Stores Have Started To Reopen

After a seemingly endless period of temporary store closures due to Covid-19, many malls and stores have reopened in the US. Our Coronavirus Tracker counts 39 US states that have allowed stores to reopen in some fashion and/or have announced dates for reopening in the near future. Many of these retail reopenings carry conditions and limits, which vary by state. For example, 16 states have implemented a maximum limit on store occupancy, ranging between 25% and 50%, and 10 are allowing curbside pickup or pickup by appointment.

New York State is following a cautious reopening plan. Regions must meet a total of seven criteria in order to reopen, and there are four stages to achieving a complete reopening. Four of the state’s regions have already met the reopening criteria, and another two on track to reopen soon. New York City and Long Island lag behind the state but are making good progress. New York City Mayor Bill de Blasio recently estimated that the city could begin to reopen in the first half of June. Still, this would be a staged reopening: Retail stores will be limited to in-store pickup and drop-off in stage one before retail stores are permitted to reopen fully in phase two.

Simon Property Group created a buzz when it announced plans to open 50% of its malls and outlet centers within a week of May 11, and several malls have begun reopening as early as May 1, albeit with reduced operating hours. Still, open malls do not necessarily mean open stores, and many malls have let consumers back inside only for them to find that stores remain closed.

Early results from mall reopenings have been understandably mixed. Many shoppers, tired of sheltering at home during the Covid-19 lockdowns, drove significant distances—even crossing state lines—to be present during mall reopenings. There were lines outside some retailers’ stores, such as Foot Locker and Forever 21, although this was partly due to limits on the number of customers allowed to enter the store. However, traffic was light: Location-data analytics provider Placer.ai analyzed cellphone location data and determined that foot traffic fell 79.2% year over year at eight reopened malls through May 11. As reopenings progress, the return to physical retail is gaining momentum among consumers. Foot traffic at the reopened malls increased at a 2.5% growth rate over the month of May, despite shorter hours and many stores, restaurants and movie theaters remaining closed, according to Placer.ai.

The coronavirus crisis hit retail hard, causing some US retailers to file for bankruptcy amid widespread temporary store closures. However, the bankruptcy process is not proving a hindrance in reopening stores. For example, although JCPenney filed for bankruptcy protection on May 15, the company planned to reopen 153 of its 846 stores this week (but is likely to permanently close as many as 242 stores). Similarly, department-store retailer Neiman Marcus has reopened 10 of its 42 stores subsequent to its bankruptcy filing on May 7. At the same time, many retailers are taking the opportunity to reassess their store fleets; during the closures, Nordstrom decided to permanently close 16 of its 117 stores.

While store reopenings are still in the early stages in the US, some retailers are seeing encouraging results. Kohl’s reported that at its reopened stores, productivity reached 50–60% of pre-coronavirus levels within two weeks of reopening. Urban Outfitters reported that initially tepid customer sales and traffic have improved week over week.

It is gratifying for retailers and consumers that stores are being allowed to reopen again in some configuration, and there are early signs of retail recovery, such as increases in consumer traffic and the release of some pent-up demand. To fill their stores again, retailers will need to assure consumers that they are doing everything within their power to ensure the safety of shoppers and store associates, in order to boost consumer sentiment and spending power.

For additional information, please read our ongoing coverage of the coronavirus outbreak and our Coronavirus Blog.

US RETAIL AND TECH HEADLINES

Home Depot Revenue Up by 7.1%

(May 19) Company press release

• Home-improvement retailer Home Depot posted a 7.1% year-over-year increase in revenue to $28.26 billion for the first quarter, ended May 3, 2020, despite cutting operating hours amid the coronavirus crisis. The company’s net income fell 10.7% year over year to $2.25 billion.
• Home Depot reported $850 million of pre-tax expenses spent on benefits for employees keeping its stores and warehouses running through the coronavirus outbreak. Overall same-store sales climbed 6.4% and US same-store sales grew 7.5% from a year ago.

Urban Outfitters Reports $138 Million Loss in First Quarter

(May 19) Company press release

• Apparel retailer Urban Outfitters posted a 31.9% year-over-year decline in net sales to $588.5 million for the three months ended April 30, 2020, as its stores remained closed from March due to the coronavirus-led restrictions. The company’s net loss for the quarter increased by 23.5% year over year to $138 million.
• Comparable retail sales decreased 28% year over year, impacted by negative retail store sales due to forced temporary store closures, counterbalanced by moderate online sales. The company also registered a $14.5 million provisional store impairment charge and a $43.3 million year-over-year increase in inventory obsolescence reserves.

Kohl’s Revenues Drop; Online Sales Accelerate

(May 19) Company press release

• Department-store chain Kohl’s reported a 40.6% year-over-year decline in total revenues for the first quarter, ended April 30, 2020, as its stores were forced to temporarily close amid the coronavirus outbreak. The company’s net loss increased by 973% year over year to $541 million.
• Kohl’s reported that e-commerce sales were up 24% for the quarter, with growth of more than 60% in April. The company ended the quarter with $2 billion in cash and $500 million available on its revolving credit facility.

Walmart’s Revenues Up 8.6%, Online Revenues Soar

(May 19) Company press release

• Walmart reported an 8.6% year-over-year increase in total revenues and a 10% year-over-year increase in Walmart US comparable sales for the first quarter, ended April 30, 2020, amid coronavirus stockpiling by consumers. Online sales for Walmart US jumped 74%, aided by the retailer’s investments in in-store pickup and delivery services.
• Walmart incurred nearly $900 million in additional costs related to Covid-19, which include cash bonuses to all hourly associates as well as spending on safety and sanitation. The company also said it would discontinue the e-commerce startup Jet.com, which it acquired in 2016 for $3.3 billion.

Complex Unveils Sole Collector App

(May 19) WWD.com

• Fashion magazine and sneaker marketplace Complex has launched the Sole Collector app, a sneaker shopping and content tool related to its Sole Collector website. The app enables users to compare prices and shop up to 40,000 new and existing sneakers across brands, retailers and resale portals.
• The app also allows users to track upcoming releases via its calendar, as well as browse video series, sneaker shopping series and other content from Complex and the website. Users can share their sneaker collections and also shop directly from the video and editorial content.

EUROPE RETAIL AND TECH HEADLINES

M&S Profits Slump; Food Business Strengthens

(May 20) Company press release

• Marks & Spencer (M&S) reported a 1.9% year-over-year decline in total revenue and 21.2% year-over-year plunge in pre-tax profits for the fiscal year ended March 28. The retailer’s full-year UK food sales saw 1.9% growth, but its UK clothing and home revenues fell by 6.2%.
• M&S saw a 75% drop in UK clothing and home sales during the six weeks ended May 9, owing to the coronavirus lockdown restrictions. During the year, M&S acquired 50% of online grocery retailer Ocado Retail, which delivered 40.4% revenue growth for the nine weeks ended May 3.

Asda Reports First-Quarter Sales Boost amid Lockdown

(May 19) Company press release

• Walmart-owned supermarket chain Asda posted a 3.5% year-over-year increase in comparable sales, excluding fuel, for the first quarter, ended March 31, 2020, boosted by consumers stockpiling ahead of the lockdown. The retailer reported a rise in demand for home deliveries, with Asda.com recording over 3,500 visits per minute during the week of March 18.
• Asda rolled out directional signage, barriers, protective screens and access restrictions in all stores to comply with social distancing norms. The company also launched its “Scan & Go Mobile” service in 581 stores nationwide, to reduce contact amid the coronavirus outbreak.

Mamas & Papas Unveil UK’s First Virtual Personal Shopping Service

(May 19) ChargedRetail.co.uk

• Maternity wear and baby products retailer Mamas & Papas has launched the UK’s first virtual personal shopping service. The service enables customers to book personal appointments online from home amid the lockdown.
• Customers can chat with sales experts, receive advice and live demonstrations of items on the shop floor through a one-hour video call session, which is available between 10:30 a.m. and 6:00 p.m. on weekdays. The retailer also plans to launch a new free virtual “Parents to Be” group session to provide support and advice to expecting couples.

Johnson Shoes Company Enters Administration

(May 19) RetailGazette.co.uk

• UK-based footwear retailer Johnson Shoes Company has filed for administration, due to strong online competition and the economic impact of the coronavirus lockdown. The company operates 12 stores under the brands Johnson Shoes and Bowleys Fine Shoes across London and South East England.
• The company's 145-strong workforce will remain furloughed while administrators seek a buyer. It has appointed joint administrators Ian Defty and Richard Toone from CVR Global to handle the insolvency proceedings.

Ted Baker Appoints David Wolffe as CFO

(May 18) Company press release

• British luxury brand Ted Baker has appointed David Wolffe as its new CFO with immediate effect. Wolffe joined Ted Baker on January 2, 2020 as Interim CFO and has over 20 years of experience in various financial roles.
• Prior to joining Ted Baker, Wolffe served as Interim CFO at sports data and technology company Genius Sports.

Aldi Partners with Deliveroo

(May 18) Company press release

• Supermarket chain Aldi has announced a trial partnership with online food-delivery company Deliveroo to offer on-demand home grocery delivery to its UK customers. Under the trial partnership, Deliveroo will offer rapid delivery of over 150 Aldi products from its Nottingham store via its app in as little as 30 minutes.
• Aldi expects to extend the service to seven more stores across the East Midlands next month. If successful, the company plans to launch the service at further Aldi stores by the end of 2020.

ASIA RETAIL AND TECH HEADLINES

Bestseller India Partners with Unicommerce

(May 20) IndiaRetailing.com

• The Indian arm of Denmark-based clothing company Bestseller has partnered with e-commerce services provider Unicommerce to enhance its digital operations. The Unicommerce platform enables Bestseller to streamline its e-commerce operations across its marketplaces, websites and apps onto a single platform.
• Unicommerce has integrated its platform with Bestseller’s enterprise resource planning platform to help the brand automate inventory updates, replenishment, deliveries and returns. Through this partnership, Bestseller India expects to enhance the customer experience and achieve faster deliveries.

Flipkart Partners with Vishal Mega Mart

(May 19) Company press release

• Indian e-commerce platform Flipkart has partnered with Vishal Mega Mart to offer home delivery of essential items from over 365 of the latter’s stores across India. A Vishal Mega Mart Essentials store is created on the Flipkart platform, where consumers can order essential products for home delivery.
• This service is currently available in 26 cities, including Bengaluru, Goa, Hyderabad, Jaipur, Kolkata and Patna, and it will be further expanded to over 240 cities in the coming four weeks.

Zalora Partners with Vestiaire Collective

(May 18) FashionUnited.uk

• Singapore-based fashion e-commerce platform Zalora has partnered with online luxury resale marketplace Vestiaire Collective. Under this partnership, Zalora’s Hong Kong customers can access more than 5,000 Vestiaire Collective’s products across the men’s and women’s categories using Zalora’s website and apps.
• This partnership is an effort to promote the adoption of circular fashion. Zalora intends to expand this partnership to other markets including Brunei, Indonesia, Malaysia, Philippines, Singapore and Taiwan.

Google To Launch Local Inventory Initiative in India

(May 18) EconomicTimes.com

• Google plans to launch a program in India that allows shoppers to view retailers’ offline inventory and helps brick-and-mortar retail stores to connect with consumers online. Through this program, offline stores can list the products available at their stores on the search page, so that consumers can view available product variants and prices.
• Google has started a pilot of this program in India, offering pre-order and delivery options on its search page. This program is currently available in 14 countries, including Brazil, Japan, the UK and the US.

Steelcase Launches Online Stores in Hong Kong and Singapore

(May 18) InsideRetail.asia

• US-based office-furniture company Steelcase has launched online stores in Hong Kong and Singapore in order to make its products accessible to people who are working from home during the coronavirus pandemic.
• The online stores offer a wide range of office-related products, including chairs, desks and accessories. Steelcase intends to further expand its online stores in other cities across the Asia-Pacific region.