Retail news from around the globe
Closures hit Canadian clothing chain
Women’s apparel chain Reitmans has become the latest retailer to file for bankruptcy protection since the pandemic lockdowns struck, joining established names such as Canadian footwear retailer Aldo Group, US luxury retailer Neiman Marcus and department store chain JC Penney.
The forced store closures aggravated the apparel retailer’s already troubled business. In its latest fiscal year, sales fell by C$53.5 million ($58.4 million), or 5.8 per cent from the previous year’s level, Bloomberg reported.
Retail consultant Doug Stephens told the CBC, Canada’s national broadcaster, that for retailers, “COVID-19 really does seek out pre-existing underlying problems. And one of those is an over-reliance on physical stores for the distribution of your goods.”
The company, which is listed on the Toronto Stock Exchange, has roots going back nearly a century, and is still run by descendants of its founders. It operates about 576 stores and employs 6800 people worldwide under brands that include Addition Elle, RW & Co and Thyme Maternity.
The company expects to remain fully operational through e-commerce. Physical stores will reopen when provincial and regional government guidelines allow it, the company said.
Rent the Runway seeks funding
New York-based fashion group Rent the Runway has become the latest start-up trying to shore up funds to survive the current economic uncertainty.
The group is seeking an infusion of some US$25 million ($38.1 million) which would value it at about US$750 million ($1.14 billion), which is down from its valuation last year of US$1 billion ($1.52 billion), Bloomberg reported. The latest funding round is led by T. Rowe Price Group, a US investment group with funds under management of more than a trillion dollars.
Rent the Runway began in 2009 as a way for women to rent dresses online for special occasions. It then expanded to everyday office wear and opened bricks-and-mortar locations in New York, Chicago, Washington DC, San Francisco and Los Angeles.
All of its physical stores across the US remain closed due to the pandemic, cutting into revenue, but the company had problems before that. Supply chain issues last year led to a spate of cash refunds and cancellations.
M&S to close more than 100 stores
Marks and Spencer, the 136-year-old institution of the British high street, intends to accelerate cost-cutting measures and store closures, a plan it has dubbed “Never the same again”.
When the pandemic hit, M&S was already struggling and in the midst of a radical reinvention, but now its CEO Steve Rowe says the group will be closing at least 100 to 120 stores and expects a third of its clothing sales to move online.
Rowe said the company’s food-service partnership with Ocado would provide an opportunity to “turbocharge” the group’s digital capability, Reuters reported.
Rowe told The Guardian that the coronavirus had changed forever people’s habits around shopping, eating and clothing – and with clothes, comfort would be king.
“On conference calls I haven’t seen anyone in a suit yet,” Rowe said. “We are barely selling any suits and the number of ties I could probably count on one hand.”
Lowe’s plays down sales boom
US home improvement chain Lowe’s has announced a 11.2 per cent rise in same-store sales, the biggest in at least 15 years, sparked largely by a surge in DIY projects by people stuck at home in quarantine.
But CEO Marvin Ellison quickly chilled any optimism about the result, telling investors that he felt the sales would fall back in the next few months, and that the company expects a deep economic recession.
“This is, without question, the most challenging environment that any of us have ever worked in. And when we look at what the customers are buying and we look at the sustainability of it, we don’t see what occurred in Q1 to continue,” Ellison told Reuters.
Lowe’s was able to keep all of its stores open across the US during the lockdown because they were considered an essential service, CNBC reports.
McDonald’s workers sue over safety
McDonald’s workers in Chicago have filed a class action lawsuit against the chain, accusing it of failing to adopt US government safety guidance on COVID-19 and endangering employees and their families, Reuters reports.
Separately, McDonald’s workers at three California locations filed administrative actions over allegedly unsafe conditions with the California Division of Occupational Safety and Health.
McDonald’s denied the allegations, saying that safety, including wellness checks and protective gear, was a top priority; however, the lawsuit comes just as the chain is beginning to open its restaurants across the US.
Workers on the front lines of food service are taking on their employers over health and safety issues relating to the pandemic, and trade groups have warned of a coming wave of litigation.
Retailer Walmart and meat producers JBS SA and Tyson Foods have each been sued over employee deaths from COVID-19.
And Smithfield Foods was sued by a workers group demanding safety measures in a lawsuit that, like the McDonald’s case, alleged the company was a public nuisance.
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