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| U.S. Retail Crisis Deepens as Hundreds of Thousands Lose Work | U.S. Retail Crisis Deepens as Hundreds of Thousands Lose Work |
| (about 13 hours later) | |
| Macy’s and Gap said on Monday that they planned to furlough much of their work forces, a stark sign of how devastating the coronavirus will be for major retailers and their workers who sell clothing, accessories and other discretionary goods. | Macy’s and Gap said on Monday that they planned to furlough much of their work forces, a stark sign of how devastating the coronavirus will be for major retailers and their workers who sell clothing, accessories and other discretionary goods. |
| Macy’s, which said the cuts would affect the “majority” of its 125,000 workers, lost most of its sales after the pandemic forced it to close stores. Gap, which also owns Old Navy and Banana Republic, said it would furlough nearly 80,000 store employees in the United States and Canada. The announcements followed similar actions by other name-brand chains with products considered nonessential. | Macy’s, which said the cuts would affect the “majority” of its 125,000 workers, lost most of its sales after the pandemic forced it to close stores. Gap, which also owns Old Navy and Banana Republic, said it would furlough nearly 80,000 store employees in the United States and Canada. The announcements followed similar actions by other name-brand chains with products considered nonessential. |
| When a national emergency was declared earlier this month, a number of retailers announced stores would close but vowed to keep offering pay and benefits to employees for at least two weeks. As the odds of reopening stores quickly became increasingly unlikely, many extended workers’ pay into April. | When a national emergency was declared earlier this month, a number of retailers announced stores would close but vowed to keep offering pay and benefits to employees for at least two weeks. As the odds of reopening stores quickly became increasingly unlikely, many extended workers’ pay into April. |
| But now, it appears the money is drying up. A large part of the retail industry that is not involved in selling groceries, toilet paper or disinfectant simply has very little cash coming in. | But now, it appears the money is drying up. A large part of the retail industry that is not involved in selling groceries, toilet paper or disinfectant simply has very little cash coming in. |
| L Brands, which owns Victoria’s Secret and Bath & Body Works, said it would furlough most store staff and “those who are not currently working to support the online businesses or who cannot work from home” starting April 5. Nordstrom said last week that it would furlough “a portion of corporate employees” on April 5 for six weeks. Buzzy start-ups are also under pressure: Rent the Runway laid off its retail employees through a call via Zoom on Friday, while Everlane laid off or furloughed nearly 300 of its workers. | L Brands, which owns Victoria’s Secret and Bath & Body Works, said it would furlough most store staff and “those who are not currently working to support the online businesses or who cannot work from home” starting April 5. Nordstrom said last week that it would furlough “a portion of corporate employees” on April 5 for six weeks. Buzzy start-ups are also under pressure: Rent the Runway laid off its retail employees through a call via Zoom on Friday, while Everlane laid off or furloughed nearly 300 of its workers. |
| The number of workers affected is significant. L Brands has 94,400 employees, according to the company’s most recent annual filing. Ascena Retail, which owns Ann Taylor and Lane Bryant, said on Monday that it was furloughing all its store employees and half its corporate workers, which amounts to about 90 percent of the company’s 43,000 employees. | The number of workers affected is significant. L Brands has 94,400 employees, according to the company’s most recent annual filing. Ascena Retail, which owns Ann Taylor and Lane Bryant, said on Monday that it was furloughing all its store employees and half its corporate workers, which amounts to about 90 percent of the company’s 43,000 employees. |
| Kohl’s, which employed an average of 122,000 associates in 2019, said on Monday that it would furlough about 85,000 of them. Guitar Center also said that it was furloughing 9,000 store employees. | Kohl’s, which employed an average of 122,000 associates in 2019, said on Monday that it would furlough about 85,000 of them. Guitar Center also said that it was furloughing 9,000 store employees. |
| “Analysts have feared that if these kinds of sales declines we’re seeing now persist, retailers are going to have to take very significant action, including the type of thing we’re seeing today just to make it through the situation,” Jay Sole, a retail analyst at UBS, said. “I think we’ll see a lot of retailers follow suit.” | “Analysts have feared that if these kinds of sales declines we’re seeing now persist, retailers are going to have to take very significant action, including the type of thing we’re seeing today just to make it through the situation,” Jay Sole, a retail analyst at UBS, said. “I think we’ll see a lot of retailers follow suit.” |
| Many apparel and accessories retailers were already under pressure before the pandemic. E-commerce has upended shopping habits and the gap between America’s most popular and least favored malls has continued to widen. Bankruptcies last year included big names like Forever 21, Barneys New York, Payless ShoeSource and Charlotte Russe. Chains like Pier 1 and Modell’s Sporting Goods filed for bankruptcy this year. | Many apparel and accessories retailers were already under pressure before the pandemic. E-commerce has upended shopping habits and the gap between America’s most popular and least favored malls has continued to widen. Bankruptcies last year included big names like Forever 21, Barneys New York, Payless ShoeSource and Charlotte Russe. Chains like Pier 1 and Modell’s Sporting Goods filed for bankruptcy this year. |
| “This only makes what is a tough situation even tougher,” Mr. Sole said, adding that labor costs are often a retailer’s biggest expense. | “This only makes what is a tough situation even tougher,” Mr. Sole said, adding that labor costs are often a retailer’s biggest expense. |
| Cutting largely part-time, nonunion workers may be the easiest cost-saving move for retailers. And by furloughing employees, instead of laying them off, the retailers could potentially speed up the return to business because, in theory, they would not have to hire a new staff. | Cutting largely part-time, nonunion workers may be the easiest cost-saving move for retailers. And by furloughing employees, instead of laying them off, the retailers could potentially speed up the return to business because, in theory, they would not have to hire a new staff. |
| Of course, many workers, in need of jobs and unable to survive on unemployment benefits, will look to find other jobs over the next few months. As department stores and apparel sellers are shedding employees, retailers focused on food and households staples like Walmart, CVS, Kroger have said they plan to hire hundreds of thousands of additional workers to keep up with the demand for essential goods. | Of course, many workers, in need of jobs and unable to survive on unemployment benefits, will look to find other jobs over the next few months. As department stores and apparel sellers are shedding employees, retailers focused on food and households staples like Walmart, CVS, Kroger have said they plan to hire hundreds of thousands of additional workers to keep up with the demand for essential goods. |
| “The strong retailers are getting stronger, and the least strong are going to lose,’’ said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. | “The strong retailers are getting stronger, and the least strong are going to lose,’’ said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. |
| But not every furloughed employee will be able to find a new position somewhere else, adding to the broader financial strain felt by many Americans. | But not every furloughed employee will be able to find a new position somewhere else, adding to the broader financial strain felt by many Americans. |
| The cuts were not limited to store employees. Gap, for example, said that it planned to reduce the number of its corporate employees around the world. | The cuts were not limited to store employees. Gap, for example, said that it planned to reduce the number of its corporate employees around the world. |
| Employees in jobs that support online sales, including call center positions and distribution center roles, were largely spared from the furloughs. A Kohl’s representative said that many of its locations would continue to ship products from stores and offer curbside pickup. Kohl’s noted it had provided two weeks of pay to store and store distribution center associates and said that it would “continue to provide existing health benefits to furloughed associates at this time, and those impacted may benefit from the recently passed coronavirus stimulus legislation.” | Employees in jobs that support online sales, including call center positions and distribution center roles, were largely spared from the furloughs. A Kohl’s representative said that many of its locations would continue to ship products from stores and offer curbside pickup. Kohl’s noted it had provided two weeks of pay to store and store distribution center associates and said that it would “continue to provide existing health benefits to furloughed associates at this time, and those impacted may benefit from the recently passed coronavirus stimulus legislation.” |
| Retailers stressed that they had already made other cost cuts before turning to their workers. Macy’s said it has decided to scale back to “the absolute minimum work force needed to maintain basic operations” after first taking actions including drawing down its credit line, suspending its dividend and halting capital spending. | Retailers stressed that they had already made other cost cuts before turning to their workers. Macy’s said it has decided to scale back to “the absolute minimum work force needed to maintain basic operations” after first taking actions including drawing down its credit line, suspending its dividend and halting capital spending. |
| Updated June 16, 2020 | |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Furloughed staff receiving health benefits would retain coverage through May, the company said, adding that it would cover all of the premium costs. A representative for the union representing Macy’s workers in New York City said that relatively few workers nationally use the company’s health benefits because the plan is costly. | Furloughed staff receiving health benefits would retain coverage through May, the company said, adding that it would cover all of the premium costs. A representative for the union representing Macy’s workers in New York City said that relatively few workers nationally use the company’s health benefits because the plan is costly. |
| L Brands, which is in the process of selling Victoria’s Secret in a deal that is expected to close in the second quarter, had previously suspended its dividend and drew $950 million from its revolving credit line. | L Brands, which is in the process of selling Victoria’s Secret in a deal that is expected to close in the second quarter, had previously suspended its dividend and drew $950 million from its revolving credit line. |
| The layoffs and furlough announcements are likely to continue, as many retailers owe rent payments on Wednesday. Many companies are desperately trying to conserve cash as they max out their credit lines and encounter landlords who are taking a hard line on payments. | The layoffs and furlough announcements are likely to continue, as many retailers owe rent payments on Wednesday. Many companies are desperately trying to conserve cash as they max out their credit lines and encounter landlords who are taking a hard line on payments. |
| Last week, Taubman, a large owner of shopping malls, sent a letter to its tenants saying that the company expected them to keep paying their rent amid the crisis. Taubman, which oversees well-known properties like the Mall at Short Hills in New Jersey, reminded its tenants that it also had obligations to meet, and was counting on the rent to pay lenders and utilities. | Last week, Taubman, a large owner of shopping malls, sent a letter to its tenants saying that the company expected them to keep paying their rent amid the crisis. Taubman, which oversees well-known properties like the Mall at Short Hills in New Jersey, reminded its tenants that it also had obligations to meet, and was counting on the rent to pay lenders and utilities. |
| “People are making choices and it is all tied to financial survival,” said Kenneth S. Lamy, founder and chief executive of the Lamy Group, a consultant to retail landlords. | “People are making choices and it is all tied to financial survival,” said Kenneth S. Lamy, founder and chief executive of the Lamy Group, a consultant to retail landlords. |
| Venture-backed start-ups that have promised new retail models have not been immune to the challenges that the industry is facing. | Venture-backed start-ups that have promised new retail models have not been immune to the challenges that the industry is facing. |
| Everlane, the apparel start-up known for its transparency regarding where and how its clothing is made, said on Friday that it laid off 222 employees who worked in customer experience and part-time in retail, and furloughed 68 full-time retail employees. It offered two weeks of severance. | Everlane, the apparel start-up known for its transparency regarding where and how its clothing is made, said on Friday that it laid off 222 employees who worked in customer experience and part-time in retail, and furloughed 68 full-time retail employees. It offered two weeks of severance. |
| A representative for Rent the Runway did not specify how many employees were affected by its “retail role eliminations.” The start-up, which lists four stores on its website and a location at a West Elm store, said it was aiming for a seamless transition with “compensation, severance and continuation of health insurance coverage.” | A representative for Rent the Runway did not specify how many employees were affected by its “retail role eliminations.” The start-up, which lists four stores on its website and a location at a West Elm store, said it was aiming for a seamless transition with “compensation, severance and continuation of health insurance coverage.” |
| Contact Sapna Maheshwari at sapna@nytimes.com and Michael Corkery at michael.corkery@nytimes.com. | Contact Sapna Maheshwari at sapna@nytimes.com and Michael Corkery at michael.corkery@nytimes.com. |