Macy’s has lost the ‘majority’ of its sales.
Macy’s, which also owns Bloomingdale’s and Bluemercury, said on Monday that it has lost “the majority” of its sales because of store closures, which started March 18 and will persist until the retailer has a “clear line of sight on when it is safe to reopen.”
The company said that as a result, it will furlough the majority of its employees this week and maintain the “absolute minimum work force needed to maintain basic operations,” according to a statement.
There will be fewer furloughs among employees supporting the digital business with call centers and distribution centers. Macy’s had 130,000 part-time and full-time employees as of Feb. 2.
The cuts show the strain that the pandemic is placing on retailers selling goods that are considered “nonessential.” Many department stores and other mall chains had already been weakened in recent years by the rise of e-commerce and changes in foot traffic at malls. A complete closure of stores and a shift in consumer spending is dealing a new blow to such companies and their many employees.
Macy’s also said on Monday that it had already stopped capital spending and paying a dividend. It has also drawn down its line of credit and canceled some orders.
“While these actions have helped, it is not enough,” the company said. “At least through May, furloughed colleagues who are enrolled in health benefits will continue to receive coverage with the company covering 100% of the premium. We expect to bring colleagues back on a staggered basis as business resumes.”
Oil prices are sliding as energy demands erode.
Oil prices hit their lowest levels since 2002 on Monday as Brent crude, the international benchmark, fell nearly 6 percent to $23.50 a barrel and West Texas Intermediate, the U.S. marker, briefly fell below $20.
The sharp economic contraction caused by the spreading coronavirus epidemic is causing demand for oil, the world’s largest source of energy, to evaporate. The gloom deepened on Sunday as President Trump extended guidelines on social distancing and nonessential travel in the United States another two weeks until at least the end of April.
In addition, there is little sign that Saudi Arabia and Russia, two of the largest oil producers, are willing to end the price war that erupted after a failed OPEC meeting this month. The United States has been leaning on the Saudis to end the feud, which has resulted in an increase in oil production. But on Friday, Saudi Arabia issued an unusual statement saying that the kingdom was not engaged in talks with Russia “to balance oil markets.”
Mr. Trump on Monday morning said he would have a phone conversation with Russia’s president, Vladimir V. Putin, to discuss the oil situation. Speaking on “Fox & Friends,” Mr. Trump said, “I never thought I’d be saying that maybe we have to have an oil increase, because we do,” he said. He said he would talk to Mr. Putin right after the TV interview.
Analysts say that the collapse in demand caused by the pandemic far outweighs the threat of new supplies from OPEC and Russia. FGE, a consulting firm, recently estimated that demand for April would fall by 17 million barrels a day — about 17 percent lower than usual — as airplanes are grounded, road traffic falls sharply and factories are shuttered.
There are growing concerns that a surplus of oil and refined products may overwhelm available storage facilities. Analysts say the combination of low prices and lack of sufficient storage to hold the glut may lead companies to shut down wells.
Stocks climb as the U.S. extends containment measures.
Stocks on Wall Street rose on Monday, even as other global markets signaled that investors were still nervous about the economy as governments extended measures to contain the coronavirus outbreak.
Trading was volatile, but the S&P 500 rose as much as 2 percent by late morning.
Stocks in Europe treaded water while shares in Asia had ended broadly lower. The economic concern was most starkly evident in oil prices, which fell to their lowest levels since at least 2002. West Texas Intermediate, the U.S. crude benchmark, briefly fell below $20.
President Trump on Sunday evening extended the social distancing guidelines for the United States until the end of April. He had earlier expressed a desire for the economy to get up and running by Easter on April 12. To offset the economic damage caused by containment measures, lawmakers in the United States enacted the largest relief package in American history.
The week ahead will bring some key economic data that will continue to paint a picture of the toll that the virus is taking on the American economy.
The jobs report from the Labor Department comes out Friday morning. It’s often a good indicator of the direction of the economy, though this month’s will offer an outdated snapshot because it will be based on surveys conducted before the nation’s business shutdown kicked…
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