Flatten the curve: The retailers shutting up shop for public safety

Starting Monday, gatherings of 500 people or more are banned across Australia in an attempt to stem the spread of the COVID-19 virus, and Australians are being urged to avoid interpersonal contact with other people.

NSW Premier Gladys Berejiklian asked people to consider not only their own health, but that that of others. 

“Don’t just think of yourself or your own family, but you could be unintentionally infecting and causing the death of so many other people,” Berejiklian said on Monday according to AAP.

“I want everyone to brace themselves. It’s not a time to be complacent or reckless or think that it’s not going to affect you.” 

Staple public events such as Vivid Sydney and the Royal Easter Show have been cancelled in accordance with these recommendations, and many retailers globally are shutting down their physical stores in an effort to help stem the spread.

Global tech business Apple announced the temporary closure of all its stores outside of Greater China from March 27 – a move chief executive Tim Cook described as an effort to “minimise the risk of the virus’s transmission.”

“As rates of new infections continue to grow in other places, we’re taking additional steps to protect our team members and customers,” Cook said in a statement to investors. 

“In all of our offices, we are moving to flexible work arrangements worldwide outside of Greater China. That means team members should work remotely if their job allows.”

Allbirds co-ceo’s Tim Brown and Joey Zwillinger said the business would be shutting its stores in the US and Europe from March 15 to 27th, adding that staff would be paid in full during the shutdown period.

“It’s hard to navigate the unknown, but as we continue to better understand how to slow the spread of COVID-19 we want to do all we can to keep our customers, employees and local communities safe,” Brown and Zwillinger said in a joint announcement.

Skincare brand Glossier also announced the closure of its permanent and temporary retail locations to help mitigate the virus’ spread. Founder and chief executive Emily Weiss said it was a fluid situation, so the business would be monitoring and adjusting its plans accordingly. 

“This is a tough call for many reasons. In our New York flagship alone, 2,000 people gather daily from around the world, often lining up down the block to connect with Glossier and with one another,” Weiss wrote in a blog post announcing the closures. 

“We’re not alarmists, we’re realists. While this may not be the right decision for every company, it’s the one where we feel we can make an impact.”

However, not all store closures are being made to mitigate the social spread of the virus – with some being a ramification of the sudden shift in spending and behaviour of customers. 

For example, due to travel being restricted to and from Australia, Flight Centre made the decision last week to shutter 100 of its under-perfoming locations. 

Managing director Graham Turner said although the outlook and timeframe for recovery was unclear, the business was well placed to overcome the challenge. 

“While people are still booking travel… we are not seeing significant softening and expect this to continue into April at least,” Turner said. 

“Within this uncertain environment, our priorities are to reduce costs, while also ensuring that we and our people are ready to capitalise when the steep discounting that is underway across most travel categories starts to gain traction and as the trading cycle rebounds.”

Daigou business AuMake also revealed it was closing a number of its stores on the back of declined store traffic and spending. Last year the business largely pivoted its model to cater to Chinese tourists in Australia, rather than shipping Australian goods to China – a decision that has made travel bans far more costly. 

AuMake executive chairman Keong Chan said the company would continue paying rental commitments while the stores are closed, but that these payments would not be onerous to the business. 

But for those who have shut down shops the question of rental payments and leasing provisions remains unanswered. 

Mirvac confirmed that while it is asking staff to work from home wherever possible, it is keeping construction sites, shopping centres, industrial sites, office assets and residential sites open until they are deemed unsafe. 

Inside Retail contacted CBRE, Scentre Group, and Mirvac for clarification on what the retail property industry is doing to assist businesses looking to shut stores amid the spread of coronavirus.

Comments

1 comment

  1. Stephen Spring posted on March 16, 2020

    The SCCA have already issued a statement regarding COAG with some shopping centres being considered essential services. However, not all retailing is done in shopping centres and often have different configurations and access. There will be some landlords who couldn’t care less as long as they receive the rent due under the lease and be highly combative, whilst there will be others who will take a more co-operative and flexible approach. It all depends on the wording in the lease. Stephen Spring retaillease.com.au

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