COVID-19

Macy’s furloughs are a sign of COVID-19 troubles for big retailers

Jack Stewart Mar 31, 2020
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While brick-and-mortar stores are closed, a lot of big retailers are trying to sell this season’s clothes at a discount online. Al Bello/Getty Images
COVID-19

Macy’s furloughs are a sign of COVID-19 troubles for big retailers

Jack Stewart Mar 31, 2020
While brick-and-mortar stores are closed, a lot of big retailers are trying to sell this season’s clothes at a discount online. Al Bello/Getty Images
HTML EMBED:
COPY

Macy’s is telling the majority of its 125,000 employees that they’ll be furloughed, starting as soon as this week, because of the COVID-19 pandemic.

All of the company’s 775 locations, including Bloomingdale’s and Bluemercury beauty stores, have been closed since March 18, with no opening date in sight.

Macy’s says it’s already done what it can financially, like drawing from its line of credit and suspending dividend payments. Now it has to reduce its workforce.

Joel Bines, managing director at AlixPartners, says we should expect other department stores to follow suit, and also ask for rent deferrals, as we roll over into a new month and payments are due.

“This is the week that we’ll begin to see some of those announcements start to come out, either formally or informally,” Bines said.

The digital side of Macy’s business will remain open, including its distribution and call centers. Denise Dahlhoff, senior researcher at The Conference Board, says a lot of big retailers are already trying to sell this season’s clothes at a discount online.

“Much of the merchandise is sitting in stores now, so when stores reopen there will be older merchandise that retailers want to clear,” Dahlhoff said.

Macy’s says its furloughed employees will get health insurance through May, and it hopes to bring people back on a staggered basis as soon as it’s able to resume business.

COVID-19 Economy FAQs

What’s the latest on the extra COVID-19 unemployment benefits?

As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.

With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?

The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.

Which businesses got Paycheck Protection Program loans?

The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.

Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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