Shortly after Macy’s warned investors Thursday (May 21) of a probable $1 billion first-quarter operating loss, Jeff Gennette, the iconic store’s chief executive officer, spoke with J.P. Morgan Analyst Matt Boss about the future of retail. Gennette said a tidal wave of bankruptcies stemming from the coronavirus pandemic will create a $10 billion window.
“We see there’s about $10 billion worth of opportunity that’s up for grabs right now based on what’s going on with the competitive climate,” Gennette said, per a CNBC report. “You see certain brands today that are either going to Chapter 13 or Chapter 11.”
Macy’s said earlier Thursday that it could lose as much as $1.11 billion in the first quarter. During the same time period last year, the chain had a net income of $203 million. Macy’s also said it could shutter more locations due to the pandemic.
On the upside, Gennette said the retailer could add categories to its offering that are proving to be strong. “Mattresses have been strong. Furniture has been strong – especially online and in the stores we’ve opened,” Gennette told Home Textiles Today. “These are similar trends we saw in Bloomingdale’s as well as Macy’s.”
Pandemic retail casualties include Neiman Marcus, J.Crew and JCPenney, all of which filed for bankruptcy protection. Amazon is reportedly eyeing JCPenney as a possible acquisition, while Nordstrom is shuttering 16 stores permanently.
Even before the global pandemic took hold, retail stores were struggling to find a foothold and stay afloat as eCommerce continued to grow and fewer people frequented malls. At the start of the new year, more than 1,000 stores announced closings. In 2019, some 9,200 stores closed — Payless ShoeSource, Family Dollar, Forever 21, Sears, Kmart and others.
This is the fourth year in a row that retailers will shutter more than 100 million square feet of space.