Following the lead of a host of its retail peers over the last few days, Kohl's (NYSE:KSS) announced Thursday that it will close all of its stores nationwide for a minimum of two weeks. The shutdown will go into effect virtually immediately, at 7 p.m. local-time today for all stores.
In a brief press release, CEO Michelle Gass said:
To demonstrate our support of the efforts under way to contain the spread of the coronavirus, we are closing all Kohl's stores through at least April 1. We will support store associates with two calendar weeks of pay. We will continue to serve customers on Kohls.com and our Kohl's App, and we look forward to reopening our stores soon to serve families across the country.
Kohl's shares have fallen along with those of its competitors in the retail sector as the COVID-19 pandemic has crippled business and brought public and private life to a virtual standstill. The company's market capitalization had fallen roughly 75% year to date through Wednesday's close, although the stock was up roughly 15% on Thursday before the afternoon announcement. At the close of trading, it was still up by more than 10% on the day.
A two-week closure will impair Kohl's sales, but the company shouldn't have much trouble managing the financial consequences. Its most recent quarterly report revealed that it has as much in working capital on its balance sheet -- $1.9 billion -- as it does in long-term debt.
While that demonstrates the company is in relatively good fiscal health, a return to normal consumption patterns can't come a moment too soon. The longer the pandemic drags on and disrupts its sales, the more fixed costs like payroll and lease payments will become problematic for Kohl's and its peers. But perhaps home-bound Americans will order more merchandise online as they fight cabin fever and wait for the public health crisis to subside.