‘Our Industry Will Fail’: Retail Leaders Ask for Emergency Aid

Predicting millions of job losses in retail, an industry presses for federal money to
save the retail clothing industries.

Over the past five days, executives from the largest American clothing brands and department stores have been engaged in urgent late-night phone calls and marathon video conferences in which they game out scenarios for their future in a world with a coronavirus pandemic.

In the end, they have decided to request a stimulus package from the United States government that would defray the worst of the effects for both big and small businesses alike, framing it as a “bridge,” not a “bailout.”

“There will be tens of millions of job losses in the industry,” said Sonia Syngal, the chief executive of Gap Inc.,

“Without immediate relief, Our industry will fail.” says Tory Burch, the founder and co-chief executive of an eponymous brand that employs 4,000 people in the United States.

“I don’t understand why no one is talking about this,” said Stephen Smith, the chief executive of L.L. Bean.

“North of 10 million people who will be unemployed.” said John Idol, chief executive of Capri Holdings.

“Taking China as a model, it’s likely nothing will reopen until between 30 to 60 days from now,” Mr. Idol said. “It will be approximately a year before business gets somewhat back to normal — and it won’t be the normal we are used to; it will be a new normal. Many companies won’t make it through.”

The result will be a domino effect. It begins with just the stores that are closed and their employees, which then hurts the brands whose clothes they sell — in fact, many are already hurting from canceled wholesale orders. Then come the factories that produce the clothes for those brands, and the mills that spin the fabric, and even the farmers that produce the raw materials. Spillover includes the ads that will be pulled from glossy magazines, the landlords without tenants, logistics companies and transporters who will lose their clients.

The Ask

Last week over 20 executives along with the NRF all got together, for the first time ever, and all agreed on three targets:

First, they would ask for financing loans for real estate companies, so brands and department stores could have their rent forgiven until they could reopen. Second, they would ask for grants that cover at least 80 percent of employee salaries if they were kept on payroll. And finally, they would request tariff and duty relief for the next 12 months.

In a letter sent to President Trump over the weekend, 90 different trade and retail organizations laid out the potential immediate losses and their belief that “the biggest single issue facing the industry right now is liquidity.” It also underscored their concern about being overlooked.

“While some retail businesses may be considered ‘essential’ and may be able to remain open, many will not.” 

Full article published on nytimes.com