Posted on 03/31/2020 12:36:05 AM PDT by L.A.Justice
NEW YORK -- Macy's, Kohl's and Gap Inc. all said Monday they will stop paying tens of thousands of employees who were thrown out of work when the chains temporarily closed their stores and sales collapsed as a result of the pandemic.
Macy's said the majority of its 125,000 employees will be furloughed this week and that it is transitioning to an "absolute minimum workforce" needed to maintain basic operations. Macy's said it has lost the bulk of its sales due to the temporarily closing of more than 600 stores starting March 18.
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Somehow I am still on the clock.
Granted I am the only computer hardware guy and Mr. Fixit for the US branch. Essential people are cut all the time. I am not untouchable.
Nobody where I am has been cut, yet.
I think if the malaria drug works and death rates start falling you’re going to see Trump start backpedaling in double-time.
All the food in the walk in coolers is lost. There is no recovery for that, and the expense is not covered by the bailout.
When the shutdown is lifted, the capacity will be reduced because spacing will have to be increased - just to quell nerve. Revenue will not match pre-virus revenue. There is a good chance that the reduced capacity (and reduced revenue) means not in business. And too, all that depends on the consumer coming back.
Same capacity issue exists in other entertainment. Sports arena, movie theater, broadway.
Going to be a big shakeup, is what's going to happen. Many people will lose the fire. as Trump has mentioned a few times, "momentum" is a critical factor to success. Once you stop, recovery is seriously at risk.
It has already lasted several months because our government and our people didn’t shut the whole country down back in Feb. Everyone should have stayed home for 21 days. Only exceptions health care, cops and a skeleton crew of utility workers and all of them living at work. If the entire world had done this, we would never see another case of CV. Now, we’re stuck with it forever.
Look around. Only a very small sliver of people are staying home. Everyone else thinks it’s party time or they’re driving 100s of miles to find tp.
In Feb there were hardly any cases and no deaths. How would that order have gone over?
It’s not an excuse to shed weight. I was working for a growing portion of Macy’s and we were doing quite well thank you. Its about cash flow, retail operates on free cash flow plain and simple, without it they have to stop. There has been contraction in retail for sure, but it is far from finished. People love to shop and experience goods first hand.
Good luck.
Seriously. Trump took the basic step of ending flights from China and the media ripped him to shreds.
Maybe cash flow just got to the point where it made people realize how overpriced magazines had been for some time. And how few really good magazines there were. From what I’ve observed since about 2008, the magazines generally aren’t worth 20% of what they cost.
My husband’s company is talking about furlough, too. We are hoping that doesn’t happen.
Cheesecake Factory -- a "boutique" restaurant chain with about 220 locations around the world -- just announced yesterday that they aren't going to pay the rent at any of their U.S. locations for the month of April.
What are their landlords going to do -- evict them? It would cost more to go through an eviction in each location than they're losing in rent payments, they can't even begin an eviction process until courts open, and it would be a bad P.R. move. And on top of all that ... who is going to move into vacant retail space in shopping malls anytime soon?
In any case, I can easily see 30% to 50% of all restaurants in the U.S. closing as a result of this. One of the factors here that doesn't get a lot of attention is that the restaurant sector has been very "overbuilt" over the years. In January 2020 people were eating out more than ever, but many restaurants were only marginally profitable even during the best of times.
Unfortunately, this will ultimately result in Single-Payer, as people realize that tying health-insurance to employment is just not sustainable. Just a matter of time.
This will hasten the death of “Brick and Mortar”.
Macy’s has been teetering for decades. It’s like people who “die” from the Wuhan Flu generally have 1-3 other underlying problems. Macy’s may be killed by Kung Flu but they were about ready to go anyway.
The Dims are getting the depression they always wanted. With it they hope to get “temporary” measures of greater federal government activity, in all sectors, that like the “new deal” they will work to keep in place after the crisis is over.
If I were Q I’d be betting the Dims and the Chicoms cooperated in this. I’m not Q.
What struck me was that the entire business model is at risk. Seating capacity and price drives the income side, and if seating capacity is cut by a quarter, that is a big hit on the income side.
Totally agree on the leverage angle. landlords are going to take a hit too, as you notice. Vacancies and can’t afford to pay are going up, so landlord cash flow goes down.
And also agree with you, this action is deferred. Courts and lawyers are going to be making out like bandits when the inevitable unravelling is allowed to commence.
Very good point. For all its flaws, one advantage of the Canadian system is that its burden on employers is very low. It’s a single-payer system financed mainly by a national sales tax, so the employer doesn’t have a huge overhead burden associated with it.
Over time are likely to see more and more restaurants go to a “storefront model” that pizza chains like Domino’s and Pizza Hut use in many locations — where there is no sit-down dining at all.
Yep, I’ve been saying for years that we need to figure out how to decouple health insurance from employment.
Health insurance was tied to employment as a workaround against wage controls.
Courts might make out like bandits, but I don’t necessarily think lawyers will. I can easily see a scenario where many of these businesses simply close their doors and don’t even bother dealing with an eviction or foreclosure process. There may hundreds of thousands of these uncontested cases where the defendant doesn’t even have any assets worth liquidating.
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