What happened

Shares of CarMax (NYSE:KMX) and Designer Brands (NYSE:DBI) both declined by double digits Wednesday morning, while Camping World Holdings (NYSE:CWH) plunged over 20% as retailers of all shapes and sizes prepare to navigate uncharted waters amid the COVID-19 pandemic.

So what

The S&P 500 and Dow kicked off April trading with 3% declines early Wednesday morning, continuing the downward momentum from the first quarter that will go into the books as the Dow's worst quarterly drop since 1987. President Trump didn't sugarcoat anything on Tuesday when he asked Americans to prepare for "a very painful two weeks."

KMX Chart

KMX data by YCharts.

Retailers have already been feeling the pain as more Americans practice social distancing and shop for necessities, rather than discretionary products. Designer Brands, which operates nearly 1,000 locations under a number of footwear and accessory brands, closed all stores on March 17, and noted that the economic damage from COVID-19 on its business and the broader industry is "unprecedented." The harsh truth is that many companies are simply unprepared to operate in a zero, or near-zero, revenue environment. Designer Brands intends to offset as much of its brick-and-mortar decline with its e-commerce business as it can.

Retailers are trying to survive, one way or another, and Camping World announced recently that CEO Marcus Lemonis will sell up to 500,000 shares of Class A stock to fund specific employee relief. "The associates are what make this Company what it is, and while they are not asking for a handout, I will do everything I can to protect their personal and financial well-being," Lemonis said in a press release.

The automotive industry has been hit hard. In addition to COVID-19's impact on foot traffic, consumers are going to be more cautious making big-ticket purchases amid job and payroll uncertainty. CarMax has shut down its operations in California, and has closed roughly one-third of its stores nationally. CarMax reports its financial results for the fourth quarter before the market opens on April 2, and it could provide investors with more insight into the expected damage in the automotive industry, and perhaps even the broader retail impact.

Car dealership lot

Image source: Getty Images.

Now what

It's never easy for investors to sit idly and watch the value of their portfolio plunge over such a short period of time, but savvy investors should look at this as an opportunity to upgrade the quality of companies they own. History has shown that markets will eventually rebound, although not all stocks will, which is why investors would be wise to keep a long-term outlook and scoop up shares of companies with strong balance sheets that will emerge from the COVID-19 pandemic in a position to rebound as the economy (hopefully) snaps back to a more normal state.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.