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Gap Inc. Q1 loss nears $1B

June 5, 2020

Dive Brief:
  • Gap Inc. on Thursday reported lopsided first-quarter results among its brands, with strength at Old Navy and Athleta unable to prevent a 43% plunge in net sales with stores shut most of the period due to the pandemic. Gap Inc. swung to an operating loss of $1.2 billion from operating income of $316 million a year ago and to a net loss of $932 million from $227 million in net income last year.
  • The company is leveraging the situation wrought by COVID-19 and exacerbated by civil unrest in some areas to renegotiate leases. In some cases where that's unsuccessful stores will permanently close, mostly at Gap, CFO Katrina O'Connell told analysts on a Thursday conference call. The company has reopened 1,600 stores or 55% of its fleet, she said.
  • Executives announced a 15% cut to the company workforce across all brands, with Gap cutting its headcount by 25%.

www.retaildive.com

Gap Inc. Q1 loss nears $1B

The retailer's namesake was hit especially hard, but each brand's unique woes helped drag it behind peers in a difficult period for apparel.
www.retaildive.com www.retaildive.com
 
Bankrupt J.C. Penney plans 154 initial store closures

Dive Brief:

  • J.C. Penney has identified 154 stores it plans to permanently close initially in bankruptcy, with more closures expected to come as the department store chain winds through the court process.
  • Going-out-of-business sales will start upon court approval of Penney's plan, the company said in a press release. A hearing on the matter is scheduled for June 11.
  • On Thursday, Penney received court approval for a bankruptcy financing package that gives it immediate access to $225 million, with access to an equal amount in July, subject to conditions. Approval came over objections from some creditors who took issue with the terms and securitization of the financing package.

www.retaildive.com

J.C. Penney begins liquidation sales at 136 stores in 37 states

The department store previously announced the permanent closure of 154 stores as it works its way through Chapter 11.
www.retaildive.com www.retaildive.com
 
jje1000 said:
Wonder if Mountain Equipment Co-op will survive this, as I've heard that they've been bleeding money; related retailer Sail just filed for bankrupcy yesterday as well.
Click to expand...

I need gear. MEC haven't opened their shops yet from what I can tell, even though they're able to. I need to do a big shop there for my trip in two weeks. Sail going bankrupt sucks as well. I prefer MEC because Sail don't carry climbing gear but either will do....not for long though?

Sad.

I'm legit trying to spend a few hundred at MEC but they need to open their doors because I don't buy anything online, nor will I.

They're sort of complimentary though...MEC for climbing, Sail for hunting gear like guns and bows. I'd like them both to survive, kthxbye.
 
Signet to close nearly 400 stores

June 9, 2020

Dive Brief:

  • Signet Jewelers on Tuesday said that at least 150 stores in North America and 80 stores in the U.K. won't reopen after closing due to the COVID-19 pandemic. By the end of its fiscal year, the retailer will also close "at least an additional 150 stores," according to a company press release. Signet runs about 3,200 stores under the Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples and Piercing Pagoda banners, and the JamesAllen.com website.
  • The retailer said it's accelerating a shift to an e-commerce focus. Digital sales in the quarter rose 6.7% to $164.7 million. Excluding the temporary closure of a James Allen distribution center, those sales grew 18.2%.
  • But that did little to mitigate first quarter declines. Total sales fell 40.5% to $852.1 million, as store comps declined 38.9% year over year. Operating loss expanded to $291.1 million, or 34.2% of sales, from $2.6 million, or 0.2% of sales in the year-ago quarter.

www.retaildive.com

Signet to close nearly 400 stores

The jewelry retailer said it's accelerating a planned shift to emphasize e-commerce, but digital sales didn't do much to stem declines in the first quarter.
www.retaildive.com www.retaildive.com
 
SunriseChampion said:
I need gear. MEC haven't opened their shops yet from what I can tell, even though they're able to. I need to do a big shop there for my trip in two weeks. Sail going bankrupt sucks as well. I prefer MEC because Sail don't carry climbing gear but either will do....not for long though?

Sad.

I'm legit trying to spend a few hundred at MEC but they need to open their doors because I don't buy anything online, nor will I.

They're sort of complimentary though...MEC for climbing, Sail for hunting gear like guns and bows. I'd like them both to survive, kthxbye.
Click to expand...

MEC on Queen West is open.
 
PinkLucy said:
What about Bass Pro or Europe Bound (I think that’s the name)
Click to expand...

I've never been to Bass Pro mostly because when I see/hear/read that name I think suburbs and I'm not going to no suburb just to go shopping for guns and knives and freeze dried food and climbing gear and bear bangers and....do they even sell canoe route maps?
I also always assumed they'd be great for hunting and fishing gear but not much good for climbing/canoeing/hiking. I'm probably wrong.

Europe Bound is decent....the Financial District location closed down a few years ago....it was right across from the previous MEC location in King Street W...I think the St Lawrence location is still open though....good call. I got some of my cooking gear and my summer sleeping bag there.
 
SAIL has camping stuff on sale right now, but I’ve only been in a store once so I don’t know what their selection is like.
 
I'm curious about the situation of Zara. From going to their Eaton Centre store frequently in the past, they were always one of the busier stores. If you go there on a Friday or weekend, there was pretty much always line ups for the check out. But I had a feeling that they were always very brick and mortar focused, and prior to Covid they didn't have a large online presence.
 
AlbertC said:
I'm curious about the situation of Zara. From going to their Eaton Centre store frequently in the past, they were always one of the busier stores. If you go there on a Friday or weekend, there was pretty much always line ups for the check out. But I had a feeling that they were always very brick and mortar focused, and prior to Covid they didn't have a large online presence.
Click to expand...

Zara has had an online store, including apps for both Zara and Zara Home for a long time.
 
Some interesting pointing from this article on Zara's parent company:


The parent company of fast-fashion retailer Zara plans to close as many as 1,200 stores around the world as it concentrates on growing online sales.

Inditex said it would “absorb” 1,000 and 1,200 stores among its brands, which also include Zara Home, Bershka, Pull & Bear and Massimo Dutti. The closures will affect as many as 100 stores in the Americas, The Wall Street Journal reported.

The Spanish company has more than has more than 7,400 stores in 96 markets, including nearly 100 Zara stores in the United States, and sells online in 202 markets.

Indietex said in a quarterly earnings statement it expects online sales to account for more than 25% of total sales by 2022, driven by an open-platform proprietary digital operating system and customer experience-focused technology solutions. Online sales accounted for 14% of total sales in FY2019.

Overall sales were down 44% in the company’s first quarter, when 88% of its stores worldwide were closed due to the Covid-19 pandemic, but online sales grew 50% in the quarter and more than 95% in April.

Indietex said that by 2022, it will invest €1 billion ($1.3 billion) in bolstering its online business and €1.7 billion ($1.93 billion) in upgrading the integrated store platform.
 
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