More Retail Pain As Myer Leads Slew Of Shutdowns

More retailers closed their doors on Friday to limit the impact of the COVID-19 virus, with department store giant, Myer the biggest news with an announcement on Friday night.

It told the ASX all stores would close as of Sunday and 10,000 staff would be stood down straight away.

It said the shut down of its stores will take place over an initial period of four weeks until April 27, 2020.

“As team members will not be working they will not be paid during this period of imposed closure. Full time and part-time members have greater flexibility to access their annual leave and long service entitlements in addition to government assistance measures,” the company said in its statement.

Myer said it will continue to operate all online businesses while ensuring a safe and hygienic environment for those team members.

“In order to make it easier for customers, Myer has reduced the threshold for free delivery to $49 per order and has relaxed the returns policy,” the company said in the statement.

The company said a mall group of business-critical roles will be maintained to undertake essential work during the period and to support our online businesses. “These roles will operate on an equivalent of 80% of their normal salaries and contracted hours.”

Myer said its board, and CEO John King, “along with all of the Executive team members, have opted to not receive any remuneration during this period but will continue to work in their respective roles.”

Homewares trader Adairs and outdoor retailer Kathmandu joined the likes of Premier Investments’ chains (Portmans, Smiggle, and others), Super Retail, Michael Hill, Mosaic Brands and Kmart and Bunnings in New Zealand.

The market took different views on what was similar news – Adairs shares fell more than 8% to 72 cents, while Kathmandu shares jumped 13% to 95.5 cents on the ASX. That rise came in a market spooked again by COVID-19 which fell a nasty 5.3% after an early rise.

Adairs said on Friday it would shut its Australian stores from Sunday for up to six weeks for the safety of staff and customers during the coronavirus pandemic.

Adairs has already shut its stores in New Zealand which has been under lockdown for most of the past week. The company will continue trading online in both countries.

“Stores will be closed for an initial period of 4-6 weeks,” Adairs said in its statement on Friday.

” Their reopening will be dependent upon our health and safety assessment, the prevailing environment and Government direction and advice at that time.

“During this period, the store team and the majority of our customer support office team will be stood down but will be able to access their leave entitlements,” Adairs said.

Clothing chain Kathmandu, which has about 170 outlets in Australia and New Zealand, took the same action on Friday. The company will also close more than 100 Rip Curl shops.

It is understood about 2,000 Australian store and head office staff will be stood down without pay for four weeks. A skeleton crew will be retained and work from home.

Kathmandu had already closed stores in regions including Brazil, Europe, New Zealand, and North America.

The board has suspended dividend payments to shareholders. Senior executives will have their pay cut by 20%.

The company was due to release its results on Monday, March 30. Kathmandu says it asked for and got approval from the NZX to push that date out to Friday, April 3.

“While COVID 19 had minimal impact on earnings for the six months ending 31 January 2020, there is likely to be a material adverse impact to earnings in the second half of this fiscal year,” the company warned on Friday.

Jewellery chain Lovisa and Athlete’s Foot owner Accent Group temporarily closed 400 shops and 500 respectively in Australia and around the world.

Woolworths said on Friday that it is creating 20,000 new jobs to meet a surge in demand.

Woolies on Friday said it has placed around 3,000 of its stood-down ALH Group team members in new roles across its BWS, Dan Murphy’s and Woolworths Supermarkets.

Woolies also said it is preparing to offer up to 5,000 short-term roles to Qantas employees who take leave without pay.

Woolies on Tuesday stood down 8,000 workers following the government ban on pubs, clubs and hotels and postponed the separation and spin-off of its Endeavour division until 2021.

Earlier this month Coles supermarkets offered 5,000 jobs to help the company deal with the panic buying of food and household goods.

Flight Centre said this week that an initial 6,000 of its global sales and support staff will either be stood down or made redundant as it battles the gathering impact of COVID-19.

In Australia, about 3,800 people in sales and support roles will temporarily stand-down.

This follows similar recent moves by other travel businesses, including Qantas, Virgin Australia, and Helloworld.

A total of 6,000 Flight Centre support and sales roles across the globe will either be stood down or, in some instances, become redundant.

The company said it will initially retain up to 70% of its 20,000 global workforce but will, however, assess further reductions as the pandemic evolves.

On Thursday Virgin Australia said more than 1,000 people will likely be made redundant from the 8,000 asked to stand down from their jobs as demand for air travel plunges.

Helloworld has announced it will be sacking 275 people across its global network and standing down another 1,300 workers.
Qantas is standing down 20,000 of its 30,000 workforce.

Five thousand retail staff are set to be stood down after the South African controlled- David Jones announced it would shut 280 of its fashion brand stores including Country Road, Witchery, Trenery, Mimco, and Politix.

It follows the news that Myer would close its stores from Friday night.

David Jones announced on Saturday that two of its smaller-format stores at Barangaroo in Sydney and James Street in Brisbane will close because the company cannot ensure social distancing requirements can be met.

The staff in those stores will be redeployed to other stores in Sydney and Brisbane. Large-format David Jones stores across the country are set to remain open.

Country Road Group stores will close for at least a month.

Country Road Group chief executive Scott Fyfe said in a statement on Saturday: “With the continuing evolution of the COVID-19 situation, we believe the time is right to suspend trading across all Country Road Group stores until further notice.”

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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