Despite the coronavirus pandemic, Macy’s is still planning to hold its annual fireworks show on July 4, New York Mayor Bill de Blasio said yesterday.
But plans to continue with the display has resulted in backlash from those who argue that spectators flocking to the show could violate social distancing guidelines. Critics further suggest the cash-strapped retailer should spend its money elsewhere.
“Macy’s should not be spending millions on fireworks displays while its own workforce is out of work. They are putting New Yorkers at risk in order to create a nationally televised commercial for themselves, and using our city as a backdrop. If they really cared about New Yorkers, they would be spending that money on healthcare coverage for the hard-working employees that made them successful for decades,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union.
With sales sliding due to coronavirus-induced store closures, Macy’s announced on March 30 that it would furlough the “majority” of its 120,000-plus employees. Through at least May, furloughed workers will continue to receive health benefits, and the company expects to bring back employees “on a staggered basis as business resumes.”
Since March 18, Macy’s fleet of over 750 stores has been closed. This includes its namesake units as well as the Macy’s Backstage, Market by Macy’s, Bloomingdale’s, Bloomingdale’s the Outlet and Bluemercury banners. The company’s e-commerce sites remains open, but it says it has “lost the majority” of its sales as stores remain shut.
Set against the backdrop of the New York skyline, the Macy’s fireworks show typically draws nearly 3 million in-person spectators, as well as 15 million through a television broadcast, according to the company. While the retailer does not reveal information regarding the cost of the production, Fox Business estimates that the fireworks alone could cost $6 million, even at wholesale prices.
In addition to furloughing a portion of its staff, Macy’s has taken a number of other cost-cutting measures in recent weeks. The department store chain has suspended its quarterly dividend, deferred capital spend and tapped its $1.5 billion revolving credit facility. Chairman and CEO Jeff Gennette is forgoing his salary for now and the company has announced plans to reduce the salaries of its management team members. All employees at the director level and above are expected to take pay reductions that could last “for the duration of the crisis.”
So far in 2020, Macy’s has shed more than 70% of its market capitalization, which is now about $1.5 billion, roughly a quarter of what it was last year. In light of the uncertainty surrounding the coronavirus, the company has withdrawn its sales and earnings outlook for the 2020 fiscal year.
Macy’s did not immediately respond to FN’s request for comment.