What's happening

Shares of Williams-Sonoma (WSM 1.20%) were down sharply at midday on Thursday, as growing concerns about the COVID-19 pandemic's effects on businesses drove a broad-based market sell-off.

As of 12:30 p.m. EDT, Williams-Sonoma's shares were down about 12.5% from Wednesday's closing price. 

So what

Simply put, investors in retail companies like Williams-Sonoma are worried that if everyone stays home for several weeks to slow the spread of the novel coronavirus, brick-and-mortar stores that rely on foot traffic will suffer steep sales declines.

The inside of a Williams-Sonoma store, with home goods and furniture visible.

Image source: Williams-Sonoma.

Williams-Sonoma has been investing to expand its online presence, but with 625 retail stores across its brands, it's still very much a brick-and-mortar retail company. And retail traffic overall is already falling: In a note on Wednesday, Morgan Stanley analyst Kimberly Greenberger said that U.S. retail traffic fell 9.1% last week, while luxury retail traffic fell 14.7%. 

Greenberger and her team attributed the declines to increased news coverage of the virus in the United States. Given the speed of developments in the past few days, next week's retail-traffic numbers are likely to be even more grim.

Now what

As veteran investors know, fear of the unknown is usually a factor in market sell-offs like the one we've been experiencing this week. For Williams-Sonoma investors, the good news is that we won't have to wait too long for an update: The company is set to report its fourth-quarter and fiscal 2019 earnings after the market closes on March 18.