The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Thursday related to the national and global response, the work place and the spread of the virus.
— The Buckle’s sales declined 16.8% in May as it continues to deal with the impact of the coronavirus outbreak. The denim retailer had closed all of its stores in mid-March. It began reopening some stores the week of April 26. The company had reopened 367 stores as of May 30, with approximately 30 additional stores reopening the week of May 31.
— G-III Apparel Group is closing all of its Wilsons Leather and G. H. Bass stores as part of a restructuring plan. Chairman and CEO Morris Goldfarb said Thursday that the company’s wholesale business, which includes the brands DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld, will continue to be the primary growth and profit engine for the company. G-III also reported that it moved to a loss in its fiscal first quarter, with sales falling 36.1%.
— Sales at The Michaels Cos. dropped 27% in its fiscal first quarter as the art and crafts retailer dealt with temporary store closings. Total comparable store sales declined 27.6%, but online sales soared nearly 300%. About 1,000 stores were open and fully operational as of Thursday. Michaels anticipates that most of its 1,273 stores will be open by the end of the month.
— Home decor retailer Kirkland’s first-quarter sales fell 40% as its stores were temporarily shuttered for about half the quarter. Kirkland’s currently has 357 of its 404 stores open to customers. Another 43 stores offer contactless curbside pickup only. One bright spot was online sales, which rose 32.3% in the quarter. In the last month of the quarter, online sales jumped 97%.
— Gap said Thursday that its first-quarter revenue fell 43% to $2.1 billion. And it reported a quarterly loss of $932 million, or $2.51 per share. The average estimate of nine analysts surveyed by Zacks Investment Research was for a loss of 65 cents per share.
— Spain’s restrictions on land border crossings with France and Portugal will be lifted on June 22. Under special measures imposed to curb the spread of the new coronavirus, only residents, cross-border workers and truck drivers were allowed since mid-March.
— Occupancy at U.S. hotels fell 43% last week to 36.6%, but it was an improvement from the prior week’s occupancy level of 35.4%. The data, compiled by STR, indicates occupancy levels are slowly increasing week to week as more lockdown restrictions ease. Occupancy at U.S. hotels hit a low of 22% the week ending April 11.
— American Airlines plans to fly 55% of its normal U.S. schedule in July, up from a low of 20% in April.
— The Transportation Department is letting airlines reduce service to nearly three dozen cities even though they were supposed to maintain destinations as a condition of getting billions in taxpayer cash and loans. The department will let airlines abandon a city if another carrier continues to fly there, according to an order issued this week.
Larger cities include New Orleans and San Antonio. The list of smaller cities that will lose at least one of their airlines includes Peoria, Illinois, Erie and Scranton/Wilkes Barre, Pennsylvania, Williston, North Dakota, and Santa Barbara and Palm Springs, California. Airlines asked to reduce service because of a steep drop in travel due to the coronavirus pandemic.
— Most of Ford Motor Co.’s roughly 30,000 U.S. white-collar employees have been told to expect to work from home until sometime in September. Company executives previously estimated they would return in July. Spokesman T.R. Reid says Ford is focused on making conditions safe for workers who have to be at a Ford facility to do their jobs, such as factory workers and those who design vehicles or test them.
— FedEx is adding surcharges to U.S. residential deliveries from big retailers whose shipping has increased during the virus outbreak. Starting Monday, FedEx will add 30 cents to the price of home deliveries from shippers that send at least 40,000 packages a week and whose volume is up 20% or more from February. FedEx is also adding 40 cents to SmartPost deliveries and $30 to oversized packages. Rival UPS began imposing similar surcharges this week. The companies say a surge in demand during the pandemic has increased their costs.
CENTRAL GOVERNMENTS & BANKS:
— Finance ministers of the Group of Seven major economies vowed support for low-income countries struggling with the coronavirus pandemic. The G7 finance ministers said in a statement that lenders also had responsibility and should “rise to the occasion.” They urged creditors to not lend on terms that involve assets unrelated to the projects the financing is meant for. The gathering, held remotely, also endorsed the suspension of repayments of bilateral debt for the poorest countries until the end of 2020.
MARKETS: Stocks ended mixed on Wall Street Thursday as the market took a pause following its longest winning streak in nearly four months.