Things are starting to look up for some department stores that had experienced plummeting traffic as the coronavirus pandemic made its way across the United States over the past six months.
Macy’s and Kohl’s, which have seen their store traffic ebb and flow in tandem with coronavirus spikes and declines across the country, are experiencing sustained recoveries as COVID-19 cases subside and states loosen business restrictions, according to a new report today from data tracking firm Placer.ai.
And that recovery, noted Placer, is being seen in the most populous, hard-hit states like Florida, Texas, New York and Illinois, which all took their turns being hot spots for COVID-19 since March.
”While large brick-and-mortar retailers still have some tinkering to do with their business models to win back customers, the good news is that shoppers are, for now, returning to department stores,” the report stated, adding that although foot traffic is still down in those heavily-impacted states, “it’s on a clear upward trend.”
Where Kohl’s is concerned, Placer’s report shows customer visits In July were down 14.7% year-over-year at its New York stores, a significant rebound from being down 98% in April when stores were primarily closed.
Meanwhile, at Macy’s — which Placer notes is “still struggling but on the right track” — foot traffic is still down more than 40% year-over-year at stores in Florida, Texas and Illinois — but a far cry the from 95% tumble store visits took in April.
“Despite an increase in COVID-19 cases during July in Texas and Florida, foot traffic swiftly rebounded in those states … ” the report added.
Although much uncertainty remains, it’s welcome news for department stores, which were struggling with heightened digital competition and shifting consumer preferences well before the coronavirus crisis.
While the rippling economic effects of the pandemic can be seen across multiple industries, retail has been particularly hard hit. JCPenney, Neiman Marcus and J.Crew were among the boldface retail names to file for Chapter 11 protection since March — and Century 21 department store added its name to the bankruptcy court docket today.
At the same time, multiple companies have resorted to furloughs (some of which are becoming permanent) and layoffs. Just this week, Under Armour announced plans to lay off 600 employees and the Mall of America in Bloomington, Minn., confirmed that 211 workers across various departments will permanently lose their jobs at the end of the month.
As indicated by the Placer report today, as well as by other data, for many retailers, COVID-19 recovery patterns have so far remained uneven.
In its second-quarter earnings report, released Sept. 2, Macy’s said its revenues for the three months ended Aug. 1 were $3.56 billion, versus the prior year’s $5.55 billion, but topped consensus forecasts for sales of $3.47 billion. The department store posted an adjusted loss of $251 million, or a loss of 81 cents per share, compared with last year’s adjusted profits of $88 million, or earnings of 28 cents per share. Still, it was significantly better than market watchers’ forecasts for a loss of $1.77 per share.
Kohl’s, which reported Q2 results on Aug. 18, posted losses of $47 million, or 30 cents per share, compared to last year’s income of $241 million, or $1.51 per share. On an adjusted basis, it posted a loss of $39 million, or 25 cents per share, compared with profits of $247 million, or $1.55 per share, in the previous year. Analysts had expected a loss of 83 cents per share. For the period ended Aug. 1, revenues declined 23% to $3.21 billion, trouncing consensus bets of $3.09 billion.