Bed Bath & Beyond closing stores, cruises prepare to sail
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.
— Bed Bath & Beyond plans to close about 200 stores over the next two years as its sales slid in the first quarter. The chain reported its quarterly sales dropped 49% due to temporary store closures amid the pandemic. Online sales soared 82%.
— The Buckle is seeing improving sales as more of its stores reopen. The fashion retailer said Thursday that sales for the five-week period ended July 4 rose 26.8% from a year ago. Buckle began temporarily closing stores in mid-March. Since then, it’s reopened 438 stores. It runs 446 retail stores in 42 states.
— Big 5 Sporting Goods is also seeing a resurgence in its business since reopening stores. The sporting goods retailer’s same-store sales dropped 28.2% in the first half of the second quarter with stores shuttered, according to preliminary data. However, the metric climbed 15.5% in the second half of the quarter as stores began reopening. For the entire fiscal second quarter, same-store sales declined 4.2% compared with a year earlier.
TRAVEL & LEISURE:
— The CEO of Delta Air Lines said Thursday that the surge of coronavirus cases in the Sun Belt and quarantine restrictions in northern states make the airline more cautious about adding flights. Ed Bastian told employees the recovery in air travel “is likely to be lengthy and slow,” and he encouraged them to take buyouts and early retirement to limit the need for furloughs as the airline shrinks. This month, Delta is operating about 30% of the flights it flew last July.
— Carnival Corp.’s AIDA Cruises will restart sailings next month. The German cruise line will have three ships making trips: the AIDAperla will be the first to set sail on Aug. 5 from Hamburg; the AIDAmar will depart from Rostock-Warnemünde on Aug. 12 and AIDAblu will leave from Kiel on Aug. 16. Bookings are now available for interested travelers.
The first cruises will take place with an adjusted passenger capacity and without calling at another port.
— American Airlines and United Airlines are delaying service to Hong Kong over a new requirement to test all crew members for the coronavirus upon arrival. American Airlines planned to resume three flights a week from Dallas-Fort Worth to Hong Kong on Thursday, but has pushed flights back until Aug. 5 citing factors including travel restrictions and entry requirements. A spokesman for United Airlines said it suspended Hong Kong flights through Friday “due to recent changes in testing protocol” and is assessing future service.
— Motorcycle maker Harley Davidson will eliminate 700 jobs worldwide as part of a major restructuring plan. The job losses include 500 current employees and 200 unfilled positions. The restructuring will cost about $50 million, including $42 million this quarter.
— A shortage of parts from one Mexican state could force Ford to cut production at some U.S. factories, the company said. Several Ford parts-supply companies have factories in the state of Chihuahua, where the government has limited employee attendance to 50% of normal to stem the spread of coronavirus. “With our U.S. plants running at 100%, that is not sustainable,” the company said in a statement. Ford says it doesn’t expect production cuts next week, and it’s continuing to work with government officials.
CENTRAL GOVERNMENTS & BANKS:
— Treasury Secretary Steven Mnuchin held out the possibility Thursday of more help for industries hit hard by the pandemic. “Restaurants, hotels, airlines are clearly going to be areas where they’re going to need more help,” Mnuchin said on CNBC, without providing any details. “We need to keep these airlines when the economy continues to rebound, we need to have air travel.”
Congress earmarked $25 billion to help airlines cover their payroll costs through September, but massive layoffs are expected after that. United Airlines sent notices to 36,000 workers this week warning that they could be furloughed in October.
Washington set aside another $25 billion for loans to the airlines, and Treasury has reached tentative agreements with 10 carriers for loans, although Mnuchin said many of the airlines won’t need those loans because they will find money on the private capital markets.
— Belgium government’s health advisers are recommending making the wearing of face masks in shops mandatory to keep the spread of the coronavirus at its current low level.
— Greek authorities say they are ready to reimpose public and travel restrictions next week, warning that safety guidance for COVID-19 is being frequently ignored. Cases in Greece have crept up since restrictions were lifted and international travel resumed in recent weeks.
— Wells Fargo is rolling out a new fund that will help provide capital, technical support, and long-term resiliency programs to small businesses, with an emphasis on those that are minority-owned businesses.
Wells Fargo will donate about $400 million in processing fees to assist small businesses in need through the Open for Business Fund.
MARKETS: Stocks mostly slumped on Wall Street Thursday after a report suggested layoffs continue to ease up across the country, but also that the pace of improvements may be stalling. More than 1.3 million Americans applied for unemployment benefits last week, still a historically high pace though down from a week earlier.