As government policymakers all over the U.S. have separately made decisions to close public schools and prohibit large gatherings, retailers have jumped on the bandwagon to temporarily close brick and mortar stores entirely or limit their hours of operation. As a result, e-commerce strength has never been as important as it is right now, as the U.S. and the global community deal with a public health crisis.
These retailers have already seen huge decreases in their share prices since COVID-19 hit U.S. shores. Will store closures hurt their revenue-building efforts even more than these companies were already expecting, or can they rely on e-commerce to make up some of the difference?
Which companies closed stores?
This is a partial list of publicly traded companies that announced store closures this week:
- Apple (NASDAQ:AAPL)
- Microsoft (NASDAQ:MSFT)
- Nordstrom (NYSE:JWN)
- Deckers (NYSE:DECK)
- Macy's (NYSE:M)
- Nike (NYSE:NKE)
- Urban Outfitters (NASDAQ:URBN)
- Abercrombie and Fitch (NYSE:ANF)
- lululemon athletica (NASDAQ:LULU)
- Under Armour (NYSE:UA)(NYSE:UAA)
"The well-being of our teammates and consumers is our top priority," Nike said in a news release, which is leading it to close stores in most global markets, but not all. For the time being, these closures take effect from March 16 through March 27.
This is the attitude that comes across throughout the news releases, as companies scramble to figure out how to navigate the coronavirus situation and ensure the health of workers and customers.
Some of the companies, such as Under Armour, Lululemon, and Urban Outfitters, made it clear that they will continue to pay employees throughout this period.
Taking extra precautions
In addition to store closures, the companies separately announced that they will take measures to ensure employee safety as well. Those who are able to work from home have been asked to do so, and workers who cannot work remotely will take shifts in company offices and maintain social distancing rules. Work areas will be cleaned and disinfected regularly.
Some other general steps many companies have taken include offering paid leave for sick families and medical services such as therapy. Lululemon is connecting with customers through online yoga and meditation classes.
Making changes as necessary
Other companies that are making changes to their hours include Walmart (NYSE:WMT) and Gap (NYSE:GPS). Walmart is reducing hours to allow for optimized stocking and sanitizing. Gap said it will closely monitor guidelines from the Centers for Disease Control and may close certain stores as the situation develops.
All of these companies are stressing, or more appropriately relying on, their e-commerce operations to get their businesses and their customers through this time. So far, the postal system is going strong, and there's no evidence that coronavirus can be transferred through the mail.
It remains to be seen how heavily this will affect these companies' top lines. While digital growth has been in the double-digits for many of these companies, they all still make the majority of their sales in-store. This may become the litmus test for how well the economy can run though a spike in e-commerce.
Retailers that work exclusively online, such as Stitch Fix and Etsy, may find that this is a boon to their sales, although Amazon may be the biggest winner of all.
Open for business
Target CEO Brian Cornell originally said that stores will remain open as usual so customers can get what they need on demand. The company is, however, putting limits on certain key items so there will be product availability for everyone.
The company updated its customers that it will close every day at 9 p.m. and dedicate the first hour of shopping to the elderly and vulnerable.
Retail stocks have tanked with the market meltdown, and these companies are stepping up to the plate by putting the public's health needs first.