Amid a year in which over 11,000 retail closings have been announced, past Macy’s CEO Terry Lundgren foresees that disruption to the retail vertical related to COVID-19 will continue into 2021 and possibly bring about additional closings of stores, CNBC reported.
“We’re not done yet. … We’re going to learn even more when we get through the holiday season,” Lundgren, who served as the department store’s chief executive between 2003 and 2017 and retired from its board in 2018, told CNBC. “Retailers who have a weak balance sheet today aren’t going to get relief in January.”
Lundgren added, “This movie is not finished. I suspect we’re going to see more closings throughout 2021.”
Even though COVID-19 and its economic impacts primarily fueled retail closures in 2020, Lundgren claims that an additional reason that figure has been high is due to the fact that the country had a surplus of stores.
“We’ve been an over-stored country for more than a decade. It’s been something we’ve been working to try to slowly and gradually correct but frankly, we have too many physical stores,” Lundgren told the outlet.
Department stores such as Macy’s and discount retailers were heavily impacted by the coronavirus earlier in 2020. However, the discount vertical is bouncing back in a significantly more expedient manner, The Motley Fool reported.
TJX’s domestic sales slid only 3.5 percent year over year in the last quarter, along with a 15 percent comp-sales jump for the HomeGoods brand. Last quarter, Macy’s sales dropped 22.9 percent year over year.
Macy’s showed an adjusted net loss in Q1 fiscal 2020 of $630 million, The Motley Fool reported. However, it received a financing package of $4.5 billion and has cut its losses quicker than anticipated during 2020.
For Q3, Macy’s registered a $91 million, or 29 cents per share, net loss — in contrast to a $2 million, or a penny per share, in net income a year prior. Net sales dropped to $3.99 billion from $5.17 billion last year.