Macy's may face more temporary store closures as Covid cases climb and threaten crucial holiday shopping season, CEO says

  • "Covid is surging again across the country," CEO Jeff Gennette said. "And that continues to impede our recovery."
  • The United States has regularly been logging more than 100,000 daily Covid infections in the past two weeks.
  • Macy's said it has plans in place if it must close additional stores, but is hopeful that won't be the case. It currently has a location closed in El Paso, Texas, due to rising cases there.

Macy's could face more temporary store closures as coronavirus cases rise rapidly across the U.S., impeding its recovery and the all-important holiday shopping season, executives said Thursday.

"Covid is surging again across the country," CEO Jeff Gennette said Thursday during a post-earnings call with analysts. "And that continues to impede our recovery, in international tourism and urban areas. And the supply chains have opened up, yet problems remain."

The retailer's online business, which grew 27% during the latest quarter, is expected to grow "at a very aggressive rate" and could expand even faster depending on whether states and cities shutter retailers again, Gennette added.

Macy's said its flagship stores like its Herald Square location in New York City have been hit the hardest during the pandemic. The lack of tourists and office workers shopping over lunch breaks and after work has hurt traffic, he said.

One of the company's locations at a mall in El Paso, Texas, is closed due to a surge in cases there. Mall owner Simon Property Group said earlier this month it had been asked to shut down its Cielo Vista Mall in El Paso. The United States has regularly been logging more than 100,000 daily Covid infections in the past two weeks.

Gennette said Macy's is monitoring other communities closely, and has a strategy to work through additional store closures. "We are getting expert at this," he said. "We're ready to go, no matter what comes our way."

Meantime, Gennette said he is optimistic consumers will be eager to get dressed up again, post-pandemic. The retailer's sales have declined with fewer people visiting its stores for work clothes, prom dresses and wedding gowns in 2020.

"A vaccination is obviously on everybody's mind … and I think there is going to be a surge of demand when that happens," he said.

There will be people who "have been wearing the same clothes, lounging in active and in casual sportswear. … And they're going to want to dress up," Gennette said.

Macy's shares were falling less than 1% Thursday morning.

The company reported a third-quarter, same-store sales decline of more than 20%. And Macy's said it expects its same-store sales of owned and licensed stores to decline by a low- to mid-20s percentage during the fall.

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