original title on leave without pay over 60 million people, the US retail industry into the hardest hit
Source International Finance
traditional retail electric providers already subject to shock and distress, the new crown to the pneumonia outbreak They brought a fatal blow.
Dow Jones Macy’s Local time on the evening of March 31, S & P Index Company (S & P Dow Jones Indices) said that the United States established retail giant will be removed from the S & P 500 index, from April 6 will be the S & P Small Cap 600 Part of the index.
To make matters worse, according to Bloomberg, starting from the week of March 30, Macy’s, fashion brand GAP and other retailers plan to force tens of thousands of employees to take vacations.
Macy’s was removed from the S & P 500 index
Raytheon S & P Dow Jones Indices said that Macy’s and will be removed from the S & P 500 index, and elevator manufacturer Otis Worldwide Corp and air conditioning manufacturer Carrier Global Corp will be included in the index. At the same time, Macy’s will join the S & P SmallCap 600 Index.
In 2019, Macy’s stock price dropped 45%, making it the worst performing retail stock in the S & P 500 index. So far this year, the stock has fallen by more than 70%. As of press time, the stock price has fallen below $ 5 and the market value is less than $ 1.5 billion. In 2015, the company’s market value reached a peak of 24 billion US dollars.
S & P Dow Jones Indices said: “The market value of Macy’s is more representative of the small-cap market space.”
In February of this year, Macy’s announced its transformation plan, closing the worst performing department stores in the next three years, reducing 2000 Jobs. In addition to closing stores, Macy’s also promised investors that by 2025, its own brand sales will account for 25% of total sales. It is reported that Macy’s will focus on supporting four major independent brands: International Concepts (International Concepts), Alfani (Style & Co.) and Charter Club (Charter Club) to achieve the goal of a single brand worth 100 million US dollars. Macy’s Chief Marketing Officer once said, “We are moving forward smoothly. Private brands have brought us high profits, but we are still upgrading these brands and building new procurement supplies and supply chain capabilities.”
Today The new crown pneumonia epidemic broke the company’s previous vision. Earlier, the international rating agency Standard & Poor’s reduced the rating of Macy’s to junk.
Currently, Macy’s said, “Messi has decided to improve its liquidity by suspending dividends and reducing capital expenditures.” “Although these actions have helped, this is not enough.”
US retail over 60 million unpaid leave
to deal with the epidemic, such as Trump government has ordered non-essential retail apparel stores like downtime related restraining order to keep social distance was extended to April 30.
The retail chains across the United States began a wave of closures two weeks ago, and millions of employees are still facing the risk of unpaid leave or dismissal.
According to data from the US Bureau of Labor Statistics, there are nearly 16 million employees in the retail industry in the United States, and many people who face the risk of unpaid leave are low-level employees. According to statistics from Bloomberg News, since the outbreak of the New Coronary Pneumonia epidemic, the number of unpaid leavers in the US retail industry has exceeded 600,000.
On March 30, Macy’s said that all of its 775 stores were temporarily closed, and some of the company’s 125,000 employees will begin unpaid leave this week, at least until May. At the same time, the company also announced a reduction in the remuneration of its directors and managers above, and the company’s CEO Jeff Gennette will not receive any salary during this period.
GAP also announced that the store closure period will be longer than originally expected on April 1, so it decided to allow most employees in the United States and Canada to take unpaid leave, but the company will continue to pay subsidies until the store reopens. The company also said it would streamline personnel, but did not disclose the number of layoffs. As of February 1, GAP hired 129,000 employees. GAP told employees on March 30 that they can apply for short-term jobs at other retail companies that are still operating and recruiting.
Coles Department Store will also extend the time limit for closing stores indefinitely, and said it will temporarily lay off employees in stores and store distribution centers. During 2019, the company employed an average of 122,000 employees.
L Brands, the secret parent company of Victoria, a well-known underwear brand in the United States, has said that it will allow most employees in the United States to take unpaid leave from April 6, but will continue to provide health insurance benefits for employees. The company has about 94,400 employees.
Nike As of now, only a few retailers such as and Lululemon have indicated that they will continue to pay employees during the store closure.
The government helped bail out the
British “Financial Times” quoted an analysis of the US research institute Coresight that the epidemic prevention measures will hit the US retail industry, and about 630,000 retail stores in the United States will face closure. The National Retail Association (NRF) expects that the US retail industry’s turnover in the next three months may be reduced by US $ 430 billion, and it is unknown how many companies can support the epidemic.
In fact, the retail crisis is not limited to the United States. Globally, the retail industry has become the second most severe industry after becoming the tourism industry.
The French “Echo” pointed out in its report that the annual turnover of Galeries Lafayette and Paris Spring Department Stores are more than 1 billion euros. Even if it is only closed for one month, it means huge losses.
At present, the US government has approved a total of $ 300 billion in deferred tax payment, plus the planned trillion-dollar fiscal stimulus plan, which is expected to bail out retail companies struggling in the epidemic.
The French government will invest approximately 45 billion euros, and at the same time provide a national guarantee of 300 billion euros for companies to borrow from banks. For enterprises that are severely affected by the epidemic, such as retail and catering, from March 17 onwards, payment of electricity, gas and rent will be suspended, and the minimum corporate tax will be exempted. “Do not let any business be under the risk of bankruptcy, nor let any French lose their source of income.” French President Macron emphasized.
The British government said it would help companies affected by the epidemic to pay 80% of their employees’ salaries. According to an estimate by the Financial Times, if one million people apply for this subsidy every month, the government will spend 3.5 billion pounds in three months.
With the support of the government, many traditional retail companies actively seek online sales to make up for the losses caused by the substantial decline in physical sales. GAP sent an email to customers saying that its online store is still operating normally. In order to encourage customers to shop online, Selfridges, a British department store, implements a free shipping preferential policy for all products.
According to Nielsen’s statistical report, in the first week of March this year, the number of French takeaway merchants increased by 5.4% compared with the previous week, and sales increased by 6.2%; online shopping turnover reached 164 million euros, an increase of 15.6 from the previous week %.
Francis Palombi, chairman of the French Merchants Union, believes that “after the epidemic, there will likely be a wave of consumption rebound and a V-shaped recovery. This is an opportunity for the retail industry after the epidemic has been tested.”