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Walnut Creek Magazine

RETAIL IN THE AGE OF COVID-19

May 08, 2020 11:53AM ● By Pam Kessler

The Bay Area apparel industry has been hard hit by the coronavirus pandemic, as nonessential retail stores remain closed to customers since mid-March. For some brands, e-commerce filled a portion of the in-store sales gap, while others already in tenuous financial positions were forced to file for bankruptcy protection.  

MACY’S placed most of its 125,000-person workforce on furlough through the month of May. "We expect to bring colleagues back on a staggered basis as business resumes," the company stated in a press release. With 775 stores in its portfolio, Macy's has begun welcoming back shoppers, reopening 68 stores this week in Georgia, Oklahoma, South Carolina, Texas, and Tennessee. But as shoppers return they will notice many changes including—hand sanitizer stations in high-traffic areas, plexiglass shields at registers, limited fitting rooms, "no-touch" beauty testers, and signs posted about social distancing and safe hygiene practices.

GAP announced plans to reopen close to 800 of its Old Navy, Athleta, Gap, Banana Republic, Janie and Jack, and Intermix stores before the end of May, starting with a few in Texas this weekend. The company is taking a phased approach to the process, working with local governments, health officials, and "industry peers," according to a corporate blog post. As stores reopen, employees are required to wear masks, practice social distancing, and wash hands frequently. The company is also considering closing all dressing rooms. Gap also announced a 10% layoff of its workforce, mainly at its San Francisco headquarters.

J CREW Group, Inc. filed for relief under Chapter 11 of the U.S. Bankruptcy Code this week, after struggling for years with debt. The company, which also owns the Madewell brand, expects a $900 million hit to its sales for the year because of the pandemic and has furloughed 11,000 employees or 85% of its full-time staff. Only 2,000 full-time staff members were on payroll at the time the Chapter 11 filing, according to court papers as reported in Retail Dive. J Crew plans to review its footprint and close stores, although it has not disclosed which locations it intends to permanently shutter.

NORDSTROM When the family-owned brand reopens, it will be with 16 fewer stores. The company announced on Tuesday that it plans to permanently close 16 of its 378 locations including stores at Arden Fair Mall in Sacramento and Stoneridge Shopping Center in Pleasanton. Nordstrom, like Macy’s, will close some fitting rooms and temporarily remove items that have been tried on before returning them to the sales floor, among other stringent health safety practices, when they reopen.

NEIMAN MARCUS The luxury department store chain filed for bankruptcy protection under Chapter 11 this week, marking one of the highest-profile collapses yet among retailers forced to shut down. According to Reuters, the Dallas-based company reached an agreement with creditors for $675 million in debt financing to aid operations while it attempts to reorganize and eliminate between $4-$5 billion in debt. The company expects to emerge from Chapter 11 proceedings in early fall. Store closures are anticipated as part of the reorganization effort.  Whether the Walnut Creek location at Broadway Plaza will be forced to close remains to be seen. 

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