2021 JANUARY – US RETAIL BUSINESS CATASTROPHIC SITUATION

In the first six months of the year, retailers filed for chapter 11 were mostly concentrated in apparel and footwear, home furnishings, grocery and department stores. Names like luxury department-store operators, Neiman Marcus, and more affordable like J.C. Penney and Stage Stores, home-goods like, Pier 1 and Tuesday Morning Corp and even vitamin seller GNC Holdings.

Then from July through mid-August, Lucky Brand Dungarees, Brooks Brothers, Ann Taylor’s parent company, Ascena Retail Group, Stein Mart, Tailored Brands, the parent company of Men’s Wearhouse and Jos. A Bank.

As mentioned earlier on, before the pandemic already a lot of liquidations and asset sales, and department stores like Lord & Taylor, J.C. Penney and Neiman Marcus were struggling as shoppers bought more online. Meanwhile, more doors are closed, and we can find this with R.H. Macy’s, Bed Bath & Beyond, Gap, and Victoria’s Secret. According to Coresight Research that there will be as many as 25,000 stores closing in 2020. Many of these stores are the anchor stores and because of their closures, they will affect the shopping malls. An ever more serious remark has been made by the real-estate research firm, Green Street Advisors LLC who has forecasted that more than half of all mall-based department stores in the US will be closed by the end of 2021. This has been the most serious remark we have heard so far.

That is why we have seen those mall owners such as Simon Property Group Inc. and Brookfield Property Partners LP have been stepping up and bought troubled tenants like J.C. Penney out of chapter 11 and other acquisitions.

We are now entering into the fourth quarter of 2020 and the holiday sales have created hope for the retailers. Hopefully that this can bail them out.

Something Inspiring

We have seen the lockdown come in the stealthiest manner, without announcing, same as the pandemic. Many countries followed but the lockdown was unable to stop the spreading of the virus. Then the under-developed countries started to talk about the livelihood or the survival.

This led to the furlough of the shopping staff, closure of the stores, landlords agreed to rent deferrals. And the working from home caused the closures of the hospitality industry and the restaurants. It even extended to the public transportations and no industry was able to be exempted.

Especially if at this time when 130 million square feet of store spaces in the US will be vacant because of the store closures, this will cause the catastrophic effect on the mall owners as many of them have buried themselves under the mortgage because of the leverage. This leads us to think if the lockdown has been helping us or some more appropriate measures should be taken.

First of all, for those countries that have been under the influence of populism, have disregarded the contagious of this virus, and their leaders have all ended up being contaminated. I can refer to Jair Bolsonaro from Brazil, Boris Johnson from the United Kingdom, and Donald Trump from the United States, although they all have recovered. We have also noticed that the countries have been torn regarding the attitude that we should take against this pandemic. But the use of face masks and the washing of hands, and the social distancing have all been the right things to do.

But going forward, we need to cooperate until the workable vaccines have been developed. We have not to over optimistic as if toward the end of this year, they will be available is already a miracle.

We should have the following attitude at this difficult time.

Under the Covid-19, the children and the younger population can fare this better. The immunity has been built up in the population, and the risk of infection to all the people, including the vulnerable ones have fall. We have to minimize mortality and social harm until we reach the herd immunity. Know the demography that is at minimal risk of death to allow them a normal life.

Strict observation of hygiene measures, hand washing, wearing mask, and self-quarantine when the community or someone in the family has been caught the virus, to contain the spreading.    

For those who are not vulnerable should be allowed to resume life as normal. Following the above instructions as required. Those who are at the age of attending universities and schools should return there and lead a normal school life to avoid damage to their minds and the pressure build on them when they are confined to study at home. There are also the risk of missing their growth as well if they are not with their classmates and teachers. The extracurricular activities, such as sports, should be resumed.

Young working adults should work in the offices normally. This can boost the use of the public transportation, and activate the restaurants and other businesses. Things to do with arts, music, sports, Broadway shows, concerts, and other cultural activities should resume. People are at their free will to attend and to enjoy a fuller life. If they feel that they are at risk, then they should refrain themselves from participating.

The current lockdown policies have already producing devastated effects on the short to long-term public health. It has worsening those with the cardiovascular disease, providing less cancer screening and deteriorating mental health. Many of us have the symptom of PTSD—post-traumatic stress disorder unknowingly.   

It is already known that Covid-19 is more than a thousand-fold higher in risk to those with the pre-conditions than the younger group. For children, Civid-19 is less dangerous than many other harms, including influenza.     

Governments from different nations should not be so torn with opinions and we should try to live positively, and it is only a matter of time until the vaccines can be found.

Going back to our normal life and revive the shopping mall can help the retail business tremendously.