By Tonya Garcia, MarketWatch
Companies ranging from Macy's to Under Armour, which have tens of thousands of workers, have announced furloughs
The latest U.S. government data shows the retail industry lost 46,200 jobs in March to furloughs and layoffs, but the cuts will be much deeper as the crisis wears on, research from the National Retail Federation shows.
The U.S. lost 701,000 jobs in March, the Labor Department reported Friday, due to business shutdowns to combat the coronavirus pandemic,
But the total retail workforce could drop by two million by May, according to The National Retail Federation.
At the end of March, the retail sector had 15.6 million jobs, down from an all-time high of 15.9 million, reached in September 2016.
Many retailers, including Under Armour Inc. (UAA) (UAA) and Macy's Inc., began closing stores across the U.S. in mid-March in order to adhere to the social-distancing guidelines for preventing the spread of the coronavirus. Since then, companies have extended those closures indefinitely.
Read:The U.S. officially lost 701,000 jobs in March, but in reality millions vanished ()
Businesses have accompanied those store closures with furloughs of store workers and members of the distribution center staff. Retailers have invested heavily in their e-commerce channels in recent years, and continue their operations virtually, but that part of the business is generally smaller than core brick-and-mortar sales.
"While retailers with robust e-commerce capabilities will be better positioned, store closures will be detrimental to financial results and also compound stress in an already declining traffic environment for mall retailers," wrote Cowen analyst Oliver Chen in a Friday note.
Off-price retailer TJX Cos. (TJX) is one of the latest company to announce furloughs ().
Not all retailers are feeling the same pain, with Walmart Inc. (WMT) ,Target Corp. (TGT) , Kroger Co. (KR) and Costco Wholesale Corp. (COST) , among others, seeing a surge in demand due to their merchandise in the food and household essentials categories.
Amazon.com Inc. (AMZN) and many of the aforementioned retailers are hiring in order to keep up with customer need.
See: With unemployment soaring, there's a run on those 100,000 Amazon jobs ()
But for much of the sector, and its workers, the outbreak is a painful period with an uncertain end.
"We are also anxious on fall and holiday inventory deliveries which will likely be severely limited as retailers and brands tightly manage working capital and cash, cancel orders, and work to stay solvent and protect balance sheets," Cowen wrote.
"We believe companies will move towards the absolute minimum workforce needed particularly as the duration of closures continue... We believe stores are likely to remain closed until mid- to late-May, at least."
And:Traffic at Walmart, Costco and Target fell for the first time in weeks as coronavirus stockpiling behavior shifts ()
(SPDR S&P Retail ETF (XRT) has slumped 32.1% for the year to date through Tuesday. The Amplify Online Retail ETF (IBUY) is down 13.5%. The S&P 500 index has fallen 8.1%, and the Dow Jones Industrial Average has tumbled 14.3% for the period.
Below is a sample of some of the major retailers that have announced furloughs.
Announcement date Company Description of those furloughed Number of employees
March 30 Gap Inc. US:GPS The majority of store teams in the U.S. and Canada 129,000
March 30 Macy's Inc. US:M Most of its staff 125,000
March 30 Kohl's Corp. US:KSS Many store associates, distribution center workers and corporate staff tied to store operations 122,000
March 27 L Brands Inc. US:LB Employees not working to support online sales and those who cannot work from home 94,400
April 2 Ross Stores Inc. US:ROST Most store and distribution center associates 92,500
March 31 J.C. Penney Co. Inc. US:JCP The majority of hourly store associates, and a "significant portion" of corporate workers and salaried store associates 90,000
April 2 Bed Bath & Beyond Inc. US:BBBY Most salespeople and some corporate workers 62,000
March 30 Ascena Retail Group Inc. US:ASNA All retail employees and half of its corporate staff 53,000
March 31 Urban Outfitters Inc.US:URBN A substantial number of store, wholesale and home office employees 24,000
March 26 Tailored Brands Inc. US:TLRD All U.S. store workers and a "significant portion" of its distribution center and office workers 20,600
Additional reporting by Katie Marriner and Jeffry Bartash.
-Tonya Garcia; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
April 07, 2020 16:29 ET (20:29 GMT)
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