People sit while Macy’s shopping bags are placed on a table in Herald Square as the city resumes Phase 4 of reopening after restrictions were imposed in New York City on August 20, 2020 to slow the spread of the coronavirus. The fourth phase enables outdoor arts and entertainment, non-fan sports events, and media production.
Alexi Rosenfeld | Getty Images
“Covid is on the rise again across the country,” CEO Jeff Gennette said Thursday during a post-earnings call with analysts. “And that continues to hinder our recovery in international tourism and in urban areas. And supply chains have opened, but problems remain.”
The retailer’s online business, which grew 27% last quarter, is expected to grow “very aggressively” and could grow even faster depending on states and cities closing retailers again, Gennette added.
Macy’s said its flagship stores like Herald Square in New York City were hardest hit during the pandemic. The lack of tourists and office workers shopping during lunch breaks and after work has impacted traffic, he said.
One of the company’s locations at a mall in El Paso, Texas is closed due to a surge in cases. Mall owner Simon Property Group said it had been earlier this month asked to close the Cielo Vista Mall in El Paso. The United States has regularly registered more than 100,000 daily Covid infections in the past two weeks.
Gennette said Macy’s is closely monitoring other communities and has a strategy to work through additional store closings. “We are becoming experts in this area,” he said. “We are ready to go no matter what.”
Meanwhile, Gennette said he was optimistic that consumers are dying to get dressed again after the pandemic. The retailer’s sales have declined as fewer people visit its workwear, prom, and wedding gown stores in 2020.
“Vaccination is obviously on everyone’s lips … and I think there will be an increase in demand in this case,” he said.
There will be people who “wore the same clothes, laze around in active and casual sportswear … and they will want to dress up,” said Gennette.
Macy’s shares fell more than 6% on Thursday morning.
The Company reported a 20% drop in sales in the same store in the third quarter. And Macy’s expects sales from owned and licensed stores to fall by a low to medium percentage this fall.