AMC aims to reopen theaters in July; nations eye economies
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the national and global response, the work place and the spread of the virus.
— AMC Entertainment lost nearly $2.2 billion in its first quarter as it struggled with the closure of all of its movie theaters amid the virus outbreak. The company recorded an impairment charge of about $1.85 billion. AMC said Wednesday that it expects to have all of its theaters worldwide open in July. It has 10 theaters reopened in Europe.
— Red Robin Gourmet Burgers’ sales fell 25.3% in its fiscal first quarter as the restaurant operator had to temporarily close its dining rooms. However, off-premise sales jumped 86.1% as the company shifted to pickup and delivery of orders. Red Robin has about 270 dining rooms reopened. The company has more than 550 restaurants in North America.
— With stores closed, GameStop’s fiscal first-quarter sales declined 34% but its online sales skyrocketed 519% globally as customers continued to seek out video games. In March the retailer temporarily closed all 3,526 of its U.S. locations — with about 65% of these locations offering limited curbside pickup.
GameStop said it had about 85% of its U.S. locations open at the end of last month, with limited customer access or curbside delivery. About 90% of its international locations opened in May. However, the video game retailer said it has since had to temporarily close about 100 U.S. stores due to nationwide protests. It anticipates keeping about 35 of those locations closed for the foreseeable future given extensive damage.
— Spanish fast-fashion retailer Inditex, owner of chains like Zara and Massimo Dutti, said first-quarter sales plunged 44% as up to 88% of its stores worldwide were shut because of the pandemic. However, online sales were up 50% in during the quarter and surged 95% in April alone. The company, which operates in 96 markets worldwide, plans to spend 1 billion euros ($1.14 billion) to boost online sales to more than a quarter of its total revenue by 2022 from just 14% in fiscal 2019. The retailer also plans to pare back its fleet of 7,412 stores to between 6,700 and 6,900 by shutting up to 1,200 smaller, older stores and opening 450 larger locations that use less energy and recycle all materials.
MANUFACTURING: General Motors is predicting that its U.S. factories will resume normal production by the end of June, perhaps sooner, while Ford expects to have its factories humming at pre-coronavirus levels by July 6.
GM Chief Financial Officer Dhivya Suryadevara said many factories were on two or three shifts of production already, and the company is working to fully ramp back up as quickly as possible.
Ford, GM and the rest of the U.S. auto industry closed factories in mid-March when employees started catching the coronavirus. Most reopened in May.
CENTRAL GOVERNMENT & BANKS:
— The French government has presented its new budget law for this year, which includes an emergency package of 460 billion euros ($523 billion) to support the country’s economy. The budget revision reinforces measures to support the state-funded partial activity scheme, tax cuts and other financial aid for businesses. It includes rescue plans for sectors worst hit by the pandemic, such as 18 billion euros ($20.4 billion) for tourism, 8 billion euros ($9 billion) for the auto industry and 15 billion euros ($17 billion) for aviation.
— Germany is prolonging its travel warning for more than 160 countries outside Europe until the end of August.
The government agreed Wednesday to extend the guidance introduced on March 17 to almost all non-EU countries, with the exception of some that have successfully contained the outbreak. Last week, Germany downgraded its travel warning for the rest of the 27-nation EU, Switzerland, Liechtenstein, Norway, Iceland and Britain.
— Bangladesh’s economic growth would stand at only 1.6% in the current fiscal year ending this month amid authorities’ latest tally on Wednesday that the death toll crossed 1,000, the World Bank said. In its latest report, the global lending agency said Bangladesh’s growth was expected to slow because the virus outbreak led to serious disruptions in industrial production, a plunge in global exports and fall of remittance. Industry leaders of Bangladesh’s garment sector say orders worth $3.18 billion have either been canceled or suspended by global brands, hurting an industry that earns about $35 billion a year from exports.
SPECTATOR SPORT: NASCAR said some fans can attend two upcoming races. NASCAR will allow up to 1,000 Florida service members, representing the Homestead Air Reserve Base and U.S. Southern Command in Doral, to attend the Cup Series race Sunday as honorary guests and view the race from the grandstands. Talladega Superspeedway in Alabama will allow up to 5,000 guests in the frontstretch grandstands/towers for the June 21 Cup race.