Macy’s Luring Back Customers; Gig Economy Slowly Recovering

(Associated Press) The coronavirus pandemic has forced the closure of thousands of retail locations and altered consumer behavior dramatically. The two combined has led to very rough stretch for companies that sell all that glitters.

— The path of the COVID-19 pandemic was traced fairly closely by the closure of Tiffany & Co. stores across the globe. Revenue in the Asia-Pacific down tumbled 46% during its most recent quarter, then in Europe, by 40%, then in the Americas, by 45%. The famed jeweler swung to a $105 million operating loss.

However in China, where the pandemic began, sales in April rose 30% as cities recovered, and by 90% in May. The rebound in sales may not be as strong elsewhere, according to Neil Saunders, the managing director of GlobalData Retail, because economic growth has been so much stronger in China for years.

— Early figures show same-store sales at Signet Jewelers slid 38.9% in its fiscal first quarter with all stores closed. Overall revenue slumped 40.5%, offset somewhat by a 6.7% increase in online sales. After beginning to unlock the doors of some stores in May, the chain now has 1,100 locations open.

— Movado Group’s first-quarter sales declined 52.5%. It has reopened 14 of its 47 stores in North America and expects all but six will open by the middle of next week. The watch seller said Tuesday that the furloughs it put into place for about 80% of its North American workforce will continue until July 13. It has cut pay for management, executives and board members through at least the end of the month.

RETAIL ELSEWHERE: Cities hardest hit by the virus have begun to reopen, but restrictions are still in place and more bankruptcies are all but certain.

— Macy’s released early numbers for its first quarter Tuesday largely in line with previous estimates. The company, whose flagship store was damaged during protests in New York, will likely post per-share losses of $2.03 per share and a 45% decline in sales.

However, the company said late Monday that it had secured about $4.5 billion of new financing and it expects to make it through the pandemic.

Macy’s had reopened 450 stores by the start of this month and CEO Jeff Gennette said sales at those stores are better than anticipated.

— Conn’s, which sells furniture, mattresses, home appliances, consumer electronics and home office products, reported its online sales soared more than 700% in the first quarter with people sheltered at home. Same-store sales, however, tumbled 17.6%.

— Coresight Research now expects between 20,000 and 25,000 stores will be closed this year, up from its most recent estimates of 15,000 closures. Last year, 9,821 store closed. About 55% to 60% of all store closures this year will be mall-based, according to estimates.

PANDEMIC GIG ECONOMY: After shelter-in-place orders drove rides with Uber and Lyft down 90% in some cities, industry analysts are seeing signs of life in this battered segment of the gig economy.

Both ride-sharing companies are experiencing a growth in demand as cities lift restrictions, according to Dan Ives, managing director of equity research at Wedbush Securities.

It’s a “slow thaw,” Ives said, but he believes the fear of getting back on subways, buses or any other mass transit may contribute to a rebound for the companies.

CENTRAL GOVERNMENTS & CENTRAL BANKS: Economists are expecting the largest economic downturn since the last world war. National governments are trying to determine what will be needed, and the best way to return to growth.

— France’s central bank forecast Tuesday that the country could see 1 million job losses this year, and it will be at least two years before it’s is back to where it was before the virus hit.

The economy could contract 10% this year, or 12% to 13% if the nation is hit with a second wave, central bank chief Francois Villeroy de Galhau told broadcaster France-Info. The economy is expected to rebound by 7% next year, according to new forecasts. Projections have virus-related unemployment peaking in mid-2021, at 11.8%.

— Spain’s Balearic Islands will allow for thousands of German tourists to arrive Monday for a two-week trial of tourism under new restrictions. The trial precedes the opening of borders to to international tourism in July. Tourism generates 12% of Spain’s gross domestic product and provides 2.6 million jobs.

MARKETS: The same stocks that led global markets higher to start the week dragged them down on Tuesday. Cruise lines, hotels, airlines and other travel related stocks all declined.

WATCHING GRASS GROW: Gardening and yard work gained a lot of new adherents during lockdown with so many sheltered at home. Scotts Miracle-Gro now expects sales growth of 16% to 18% this year, far beyond earlier projections for 6% to 8% growth. That growth is led by the U.S., where the company projects growth of 9% to 11%, compared with its previous expectations of between 1% and 3%. Shares recently hit an all-time high.