Thousands of retailers may open their doors, but won't survive pandemic: Former Sears Canada CEO
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Mark Cohn, former Sears Canada CEO and professor of retail studies at Columbia University business school, joins 'Power Lunch' to discuss the troubles that lay ahead for the retail industry after the coronavirus pandemic.
Retailers and restaurants shuttered by the coronavirus pandemic had just started to reopen their businesses. Employees at big-box stores worked to restock shelves and resume more typical store hours.
But in recent days, nationwide protests prompted by the death of George Floyd in Minneapolis have led to shattered storefronts and looting and forced many doors back shut.
Over the weekend, protesters marched across cities including New York, Dallas, Atlanta and Chicago, with signs and calls for justice for Floyd, an unarmed man who died as a Minneapolis police officer kneeled on his neck. Violent clashes with police and property damaged ensued, and mayors responded with citywide curfews, further ratcheting up tension.
The protests have left behind jarring images across the country: Boarded-up windows at Amazon-owned grocer Whole Foods. Looted Chanel and Coach stores in Manhattan’s luxury SoHo and Fifth Avenue shopping districts. A vandalized Nordstrom flagship store in Seattle. And a Target in Minneapolis that’s so damaged, it will need to be rebuilt.
In downtown Dallas, glass windows across the front of Neiman Marcus’ flagship store were smashed, adding to the burdens that the luxury department store chain already faces in bankruptcy court.
The protests have added to retailers’ and restaurants’ mounting list of challenges. The companies have had to work hard to stay in business, as stay-at-home orders shut shopping malls, halted dine-in food service and shifted entire businesses online. Many have furloughed thousands of employees, slashed executives’ salaries and drawn down credit lines. And some are at risk of joining J.Crew, J.C. Penney, Tuesday Morning and Stage Stores in filing for bankruptcy.
At stores that remained open as essential retailers, such as Walmart and Target, hourly workers took on new risks as they dealt with a surge of frenzied shoppers — and some got sick and died from Covid-19. The pandemic amplified simmering tensions about low pay and working conditions, and led some workers to strike.
“It’s a national disaster within a national disaster,” said Forrester retail analyst Sucharita Kodali. “You’d have to go to a movie to look for this level of catastrophe.”
One of the industry’s national trade groups, Retail Industry Leaders Association, acknowledged the disruption of protests on retailers’ recovery.
“There was a feeling in recent weeks that things were headed in the right direction, and that carefully reopening the economy was possible, and that a sense of normalcy was around the corner,” its president Brian Dodge said in a statement. “But the senseless death of George Floyd and the ensuing violence of the last few nights has shattered more than storefronts, it has broken the fragile confidence of a nation already struggling with anxiety, frustration, and fear.”
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