THE CHEAT SHEET

America's Department Stores Are Going Bankrupt

Source: Courtesy

• Neiman Marcus, J.C. Penney and Lord & Taylor are all reportedly considering bankruptcy filings
• CNBC reports Neiman Marcus is seeking $600 million in emergency funding to keep operating while it restructures; J.C. Penney may need up to $1 billion, The Wall Street Journal reports
• Department store chains make up nearly one-third of mall square footage, according to The New York Times

The Bottom Line: Department stores may be the first dominos to fall, but they probably won't be the last. Many American malls rely on department stores as anchor tenants. J.C. Penney closing some stores would further weaken already struggling lower and mid-tier malls, and drag down sales of other stores.

Tapestry Provides a Health Check for American Fashion Retail

A Coach pop-up store | Source: Courtesy

• Tapestry reports quarterly financial results on April 30
• The Coach and Kate Spade New York owner has furloughed 2,100 part-time store associates and drew $700 million from its credit line
• Tapestry shares are down about 50 percent since late February

Fashion's Big-Box Blues

• Amazon reports quarterly results on April 30
• Last week, Target said revenue had risen during the pandemic, though costs were up as well
• Apparel sales are down sharply at big-box retailers even as shoppers spend more on groceries and other essentials

Some of America's biggest fashion retailers have remained open throughout the Covid-19 crisis — not that it's done the industry much good. Target, Walmart and Amazon have seen surging sales as consumers stock up on essentials. Clothing hasn't made the cut; Target said last week that, while sales were up 7 percent overall and had doubled online, apparel and accessories had plunged by 40 percent in April. Amazon even slowed or halted shipping orders of non-essential items to speed delivery of food and health products, though that bottleneck appears to be easing. Beauty has fared a bit better, as some cosmetics and skin-care products are seen as affordable luxuries that can be tossed in the cart along with the toilet paper and pasta.

SUNDAY READING

Professional Exclusives You May Have Missed: 

• Why beauty companies keep tinkering with their hit products.
• Will Covid-19 change fashion photography?
• Can fashion cash in on the Animal Crossing craze?
• Try virtual vouchers instead of deep discounting.
• For some labels, drops are working where nothing else is.
• The best case, worst case for fashion media giants.
• How are sports brands marketing without sports?
• What brands are doing instead of influencer campaigns.
• What to do with all that excess inventory.

The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com. 

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