According to National Retail Federation (NRF) chief economist Jack Kleinhenz, economic recovery across the United States from the pandemic is likely to come gradually and may vary by location. After seeing growth at an annualized rate of 2.1 per cent at the end of 2019, US gross domestic product shrank by 4.8 per cent in the first quarter of this year, ending a record 10-year period of economic expansion. That was the largest drop since 8.4 per cent in the fourth quarter of 2008 during the Great Recession.

Considering the economy was buoyant through the middle of March, the first-quarter decline is likely just a murmur of how severely the pandemic has devastated many parts of the US economy. Retail sales saw their worst month-over-month drop on record in March, falling by 8.7 per cent from February. And consumer spending fell an annualized 7.6 per cent during the first quarter, the largest drop since the second quarter of 1980. Despite those declines, the pandemic has hit the retail industry unevenly.

Temporarily closed stores are bearing the brunt of the impact while stores that remain open have had customers lined up out the door to stock up on essential goods. Consumer confidence has also taken a hit. The Conference Board’s Consumer Confidence Index was at 86.9 in April, its lowest level since June 2014, and consumers’ view of current conditions saw a record 90-point monthly drop to 76.4. But consumers’ expectations for conditions six months in the future were more optimistic, rising seven points to 93.8.

German sportswear firm Puma expects its second-quarter results to be worse than the first as more than half of global sports retail space is currently closed, after it reported first-quarter sales declined less than analysts had feared. Puma expects all markets to recover by the end of the year and for growth to return in 2021, noting that the crisis has made many people do more sports than before and has strengthened the trend towards more casual dressing.

The brand’s first-quarter sales fell a currency-adjusted 1.3 per cent to €1.3 billion ($1.40 billion), while operating earnings dropped 50 per cent to €71.2 million compared to average analyst forecasts for 1.26 billion and 74 million respectively.

Analysts expect Puma to be more resilient in the COVID-19 crisis than its German rival Adidas , whose first-quarter sales tumbled by 19 per cent and also warned of a worse second quarter.

In the first quarter, Puma’s sales fell 12 per cent in the Asia-Pacific region but it still managed to grow 3.5 per cent in Europe, Middle East and Africa and by 3.1 per cent in the Americas as the virus lockdowns only started there in March. The brand has secured a resolving credit facility of €1900 million including 625 million from German state development bank KfW. Its business in Asia, especially China and South Korea is recovering with some stores opening again in Europe. E-commerce operations of the brand grew by around 40 per cent in the first quarter.

 Italy’s Camera Nazionale della Moda Italiana (CNMI) has announced that the Men’s Milan Fashion will now be presented in a digital format. The Milan Digital Fashion Week will be postponed to mid-July and present men’s spring/summer 2021 collections and men’s and women’s pre-collections on a digital platform with photo and video content organized in a calendar with slots for each label.

The move was taken to help companies reach out buyers and promote their brands without person-to-person contact that risked spreading the virus anew. Fashion groups may also decide to join shows and presentations planned for the September Women’s Fashion Week, which for the time being is still planned to include catwalks and non-digital events.

The CNMI decision echoes one by the British Fashion Council to merge women’s wear and menswear collections for June’s London Fashion Week into one platform and present them in digital form only.

Armani Group’s men’s and women’s collections would be shown in Milan in September, although the format has not yet been determined. The brand’s runway show, Armani Privé, will be postponed to January 2021 and will be held in Milan, not in Paris where it usually takes place.

Levi Strauss & Co, posted 5 per cent revenue increase to $1,506 million in first quarter (Q1) FY20 ended on February 23, 2020 compared to sales of $1,435 million in same period prior year. The brand’s net income grew by 4 per cent to $153 million while its gross profit rose by 7 per cent to $839 million.

The brand’s selling, general and administrative (SG&A) expenses were $660.5 million while operating income was $178.7 million. Its revenues in the Americas grew by 4 per cent to $746 million.The region's direct-to-consumer net revenues grew 22 per cent.The region's wholesale net revenues declined five per cent. US wholesale net revenues fell 6 per cent.

In Europe, net revenues jumped 10 per cent to $513 million reflecting continued broad-based growth in both direct-to-consumer and wholesale channels across the region.

In Asia, net revenues decreased 2 per cent to $248 million as the growth across most of the region's markets was offset due adverse impact of store closures and reduced traffic during the last six weeks of the first quarter resulting from the Covid-19 outbreak, which was primarily concentrated in China but also impacted Hong Kong and north Asia.

With stores shut for weeks, employees furloughed and sales plummeting, many major retail stores are planning to file for bankruptcy. The first major retailer to fall victim to the pandemic's economic fallout is clothing chain J. Crew which filed for Chapter 11 bankruptcy.

J. Crew Group Inc. sought bankruptcy protection after shutting 500 stores worldwide. As per a court filing by Michael J. Nicholson, the company's chief operating officer, the significant financial strain caused by COVID-19 will cost the company $900 million in sales due primarily to store closures across all brands. The company reached a debt restructuring support agreement with its lenders and has also secured $400 million of new money financing commitments.

Similarly, with its stores closed nationwide during the pandemic, resulting in a sharp decline in sales, JC Penney shares have declined nearly 80 per cent this year. Bankruptcy is one of many options on the table for the company to become a sustainable, profitable company but at this point, no decision has been made. The company had been in the midst of a major turnaround before the pandemic hit. It has now made the "strategic decision" to skip a bond interest payment that was due April 15. It has a 30-day grace period to continue discussions with lenders and assess its options.

Privately-owned Neiman Marcus is expected to file for bankruptcy soon, according to lenders. It closed its more than 40 stores across the U.S., including Bergdorf Goodman, in mid-March. The group was already struggling prior to the pandemic, with $4.8 billion of outstanding debt, according to S&P Global Ratings.

Plano-based US retailer JC Penney refused to make a $17-million interest payment that was due by May 7 on its senior secured term loan. Penney has a grace period of five business days under its loan agreement to make the payment before the company is in default. The skipped debt payment is reportedly part of a bigger battle for Penney.

The retailer took the decision to skip payment while it evaluates certain strategic alternatives, none of which have been implemented at this time. The retailer was scheduled to meet representatives from Sephora, a French multinational chain of personal care and beauty stores, in the district court in Sherman today. Instead, the two companies have reaffirmed their 14-year partnership to operate Sephora shops inside more than 650 Penney stores.

Penney and Sephora said in a joint press release that they resolved their legal matters and have agreed to mutually beneficial revisions to their joint operating agreement without providing any details. The chain of 840 department stores is approaching the end of a 30-day grace period before it’s in default on $388 million in bonds due in 2036. On April 15, Penney didn’t make a $12 million interest payment on those bonds.

Most industry analysts expect Penney to file for Chapter 11 bankruptcy soon. The company has both a debt issue — $4 billion in long-term debt — and stores in malls that have either lost their positions in suburban markets or are in smaller cities with less potential for growth.

As Coronavirus has devastated H&M’s business since the middle of March, the brand expects its second quarter to be loss-making as sales will be significantly lower and it will also have to offer a lot of discounts to shift stock from earlier in the season. Around 80 per cent of the brand’s stores have been closed since that time, although from the end of April, it has gradually started reopening them in a number of markets where local restrictions and social distancing rules allow.

The group’s sales between March 1 and May 6 have fallen by 57 per cent year-on-year in local currencies. Its online sales, which continue in 46 of its 51 e-tail markets, have increased by 32 per cent in the same period.

H&M endured the biggest fall in sales in Italy with an 80 per cent drop, followed by Spain on 76 per cent, France and the US on 71 per cent each and the UK on 60 per cent. Its sales in Poland have fallen by 59 per cent, Japan 58 per cent, Denmark 51 per cent, Finland 49 per cent, Russia 47 per cent, Germany 46 per cent and Norway 36 per cent.

The sales of Hermès International SA, a French high fashion luxury goods manufacturer, decreased by 6.5 per cent to €1,506 million in first quarter (Q1) FY20 ended in March 2020 compared to sales of €1,610 million in same period prior year. Ready-to-Wear and Accessories sales fell 9.6 per cent to €325.8 million compared to sales of €360.2 million in Q1 FY19.

The leather goods and Saddlery business declined 6 per cent to €771.1 million due to closure of stores in various geographies. Silk and textiles sales dropped 18.1 per cent to €115.0 million. Sales in France fell 8.6 per cent to €168.9 million, while sales in rest of Europe dropped 10.3 per cent to €234.7 per cent. Sales in Japan grew 4.6 per cent to €213.6 million. Asia-Pacific region reported 8.4 per cent decrease in its sales to €600.9 million. Sales in Americas were 4.2 per cent down to €258.5 million.

The company in its outlook reported that the developments in the pandemic and the measures decided by governments do not enable them to anticipate the dates for re-opening stores. And Hermès believes that sales in the second quarter will be significantly impacted by the closures of a significant part of the network.

Austrian fibres producer Lenzing has formed a joint venture with Austria’s Palmers Textil AG to produce protective masks for the European market in April The JV, Hygiene Austria LP GmbH, is producing so-called mouth-nose protective masks and surgical protective masks and plans to produce more than 25 million masks per month.

The company reported a 59 per cent drop in first-quarter net profit and dropped its dividend as the sector grapples with oversupply. Its net profit fell to $19.2 million and its revenue declined by 17 per cent for the three months to March 31.

The company’s prices for standard viscose fell to an all-time low due to oversupply, said the company, which produces cellulose fibers derived from sustainable wood and pulp. It would withdraw its dividend proposal of one euro per share due to the coronavirus crisis.

Japan-based manufacturer and retailer Fast Retailing, reported 4.7 per cent decrease in its revenues to ¥1,208 billion in the half-year period (H1) FY20 ended on February 29, 2020 compared to ¥1,267 billion in same period prior year. Operating profit for six months period were ¥136.7 billion compared to ¥172.9 billion in H1 FY19.

The company’s gross profits in H1 FY20 were ¥576.7 billion. Its selling, general and administrative expenses reported a loss of ¥438.7 billion. The company reported weaker performance was due to reductions in revenue and profit at Uniqlo International segment (South Korea, Mainland China, Hong Kong and Taiwan), which were adversely impacted by Covid-19 and other factors.

Uniqlo Japan reported 5.7 per cent decrease in revenue to ¥463.5 billion. However, its operating profit rose by 5.7 per cent to ¥71.6 billion. Same-store sales declined by 4.6 per cent after the warmer winter weather stifled sales of core winter items. While e-commerce sales grew by 8.3 per cent, the rate of online sales growth slowed for the same reasons as for our physical stores.

Uniqlo International reported 6.7 per cent decline in revenue to ¥ 541.2 billion and operating profit fell 39.8 per cent to ¥53.2 billion. This was reportedly due to considerable reductions in revenue and profit at Uniqlo South Korea and Uniqlo Greater China, which were both adversely impacted by the outbreak of Covid-19 and other factors.