(Bloomberg) -- Major U.S. retailers are shelving plans to reopen at the end of March amid the deepening coronavirus crisis, and the extended shutdown may accelerate consumers’ existing migration away from malls, analysts at Jefferies LLC said.
Tailored Brands Inc., which owns Men’s Wearhouse and JoS. A. Bank, has furloughed store employees and will now keep stores closed until at least May 4, while Coach and Kate Spade owner Tapestry Inc. will delay its return for two more weeks until April 10. Nordstrom Inc. has pushed its reopening date back at least a week until April 5, and other department stores are expected to follow.
Even if some stores manage to open on schedule, consumer behavior may already have changed forever, according to Jefferies analysts including Randal Konik.
“Stores could be closed longer than we think,” Konik wrote in a note to clients titled “Closeageddon” on Thursday. “The more stores are closed, the more demand is curtailed during those actual closures.”
In mid-March, more than 47,000 U.S. stores closed in a little over a week as coronavirus spread across America. Most retailers initially set two-week timelines in the hope that life would return to normal by April. That’s now unlikely to be the case.
President Donald Trump said earlier this week that he wants to scale back social distancing measures and kickstart the U.S. economy by Easter on April 12. The vision is out of step with governors and local leaders, however, who have shut down entire states and cities to slow the spread of the virus.
Regardless, Konik said “mall traffic looks set to change forever, and working from home could become sticky.” A sharp decline in demand “puts many retailers at risk,” he said, while online sales, which are less profitable than in-store sales, will fail to fill the gap created by the extended shutdown.
The outbreak has battered retail stocks in March. Kohl’s Corp., Nordstrom and Macy’s Inc. have all declined around 50% this month. Gap Inc., L Brands Inc., and Ulta Beauty Inc. have also registered sharp declines.
Even before the outbreak, investors were concerned by broad consumer trends to online retail and away from malls and department stores. This has sparked a wave of bankruptcies and store closures that’s been dubbed the retail apocalypse.
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