By Heather Haddon, Sarah Nassauer and Esther Fung
As some states lurch toward restarting their economies after
coronavirus closures, many big companies remain hesitant to open
their doors.
Macy's Inc., Gap Inc. and TGI Fridays Inc. are among the big
national chains saying they will sit out the early phase of
reopening in states such as Georgia and South Carolina, citing
health concerns and uncertain customer demand. Other businesses,
including Best Buy Co. and Starbucks Corp., will also continue in
lockdown mode, keeping stores closed to shoppers and fulfilling
online orders or curbside pickup.
Big chains say their phased reopening plans will rely on state
and local guidelines, along with infection rates, their own market
analysis and consumer surveys. Many large retail locations aren't
profitable if the number of shoppers who can safely enter is
restricted to just a handful of people, consultants say.
Retailers that have opened are working to reassure shoppers.
Dick's Sporting Goods Inc. opened some stores this week in South
Carolina, Iowa, Nebraska, Oklahoma and Virginia, after moving to
curbside pickup and online orders last month. "We want to assure
you that we are taking preventative measures to keep our stores
clean and safe," said the company's website for those local stores
on Thursday. The company told analysts Thursday that it is working
to figure out the right staffing and operating model as stores open
and has canceled some product orders to adapt.
Georgia is allowing some businesses, including hair salons and
bowling alleys, to open Friday, with restaurants and theaters to
open next week. South Carolina's governor allowed retail stores to
resume operations this week at 20% of normal capacity, or five
people per 1,000 square feet, but said local authorities could
choose to keep restrictions in place -- a patchwork that some
executives find vexing.
"Governor says one thing and a mayor says something else. There
is a lot of conversation and it's not necessarily congruent," said
Ray Blanchette, chief executive of TGI Fridays.
Mr. Blanchette said the 840-unit chain wouldn't be the first to
open its doors given the potential virus exposure for customers and
workers. "We don't want to be on the leading edge here," he
said.
Major U.S. theater chains such as AMC Entertainment Holding Inc.
and Cinemark Holdings Inc. are unlikely to open locations in some
states before others, according to people familiar with the matter.
With Hollywood holding back on major film releases, the overhead
required to reopen doesn't make fiscal sense, the people said.
"While some states and localities are beginning to authorize the
opening of movie theaters under certain conditions, the movie
theater industry is also a national one," the National Association
of Theatre Owners said Wednesday. "Until the majority of markets in
the U.S. are open, and major markets in particular, new wide
release movies are unlikely to be available."
Retailers are likely to reopen gradually to avoid financial
strain, considering some shoppers will be uneasy going into
physical stores for some time, said Jean-Emmanuel Biondi, retail
consultant at Deloitte. The firm is using cellphone location and
credit-card data to advise clients which areas are likely to see
store traffic return first.
McDonald's executives will discuss reopening dine-in service
with franchisees, who own 95% of the chain's U.S. restaurants, said
McDonald's U.S. President Joe Erlinger and Vicki Chancellor, an
Atlanta-based franchisee and chair of the company's national
advertising committee.
Georgia franchisees will review the governor's reopening
guidance and decide on where it can do so while keeping customers
and workers safe, Ms. Chancellor said.
Many chains have furloughed workers and skipped April rents to
preserve cash. Retailers continue to handle online orders, but have
lost most of their sales. Gap, for example, has some staff using
inventory from stores to fill online orders. But on Thursday the
company warned it was burning through its savings and needed to
raise additional funds this year.
Best Buy Co. stores across the country have sold products online
and allowed customers to pick up curbside since shutting stores.
"While we're still reviewing the orders in full, for now we will
continue operating solely with contactless curbside service across
the country, including in South Carolina and Georgia," a Best Buy
spokeswoman said.
Reopening would require national retailers to rehire thousands
of workers and add cleaning costs, even though it could be weeks
before shoppers return in large numbers. The coronavirus stimulus
bill gives unemployed Americans an extra $600 in weekly benefits
until July 31, which means some hourly staff would take home less
if they returned to the job before then.
Kohl's Corp. plans a phased reopening based on state and local
guidelines, health data and the installation of protective
equipment, a spokesman said. When the lights come back on, the
department-store chain may add safety measures including removing
beauty-counter testers and signage reminding shoppers to keep a
safe distance.
Anderson Mall in Anderson, S.C., will reopen Friday, one of the
few malls in the state opting to do so after restrictions were
lifted on retailers there this week. Shoppers will be encouraged to
wear masks, and frequent cleaning and sanitization will be the
norm.
Still, Lou Conforti, CEO of mall owner Washington Prime Group
Inc., doesn't expect crowds for now. "I don't think there will be a
threshold issue for the first week," he said, adding that smaller,
local tenants are more likely than big chains to roll up their
shutters this week.
Hibbett Sports, Trends, White Willow Boutique, Chick-fil-A,
Books-A-Million and Philly Cheesesteak Express are among mall
tenants expected to open Friday, the landlord said.
Orders requiring malls to close in Tennessee and Georgia haven't
been lifted yet. Saks Fifth Avenue plans to open for curbside
pickup at its Houston and San Antonio locations Friday, part of
Texas Gov. Greg Abbott's "retail-to-go" plan to get the economy
moving. Saks hasn't set a date for opening stores to shoppers.
Landlords of open-air shopping centers say tenants generally
decide whether to reopen, though property owners are considering
how to manage popular restaurants, such as Chick-fil-A, that may
have lines out the door.
"We think there is a lot of pent-up demand out there," said John
Kite, chairman and chief executive officer at Indianapolis-based
shopping center owner Kite Realty Group. Two of Kite's centers in
South Carolina could see some tenants reopening this weekend, he
said.
Making customers feel comfortable in stores and restaurants will
be both an art and a science. TGI Fridays will remove seating and
install plexiglass before diners return, and employees will have to
wear masks. But Mr. Blanchette, the company's CEO, said he wants to
equip servers with colorful, branded masks to enliven the
atmosphere. "We don't want it to look like an operating room when
you are at a restaurant," he said.
--Suzanne Kapner and R.T. Watson contributed to this
article.
Write to Heather Haddon at heather.haddon@wsj.com, Sarah
Nassauer at sarah.nassauer@wsj.com and Esther Fung at
esther.fung@wsj.com
(END) Dow Jones Newswires
April 24, 2020 09:17 ET (13:17 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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