As COVID-19 Closures Continue, America's Biggest Retailers Furlough Employees

Illustration for article titled As COVID-19 Closures Continue, Americas Biggest Retailers Furlough Employees
Photo: Al Bello (Getty Images)

If I’m honest, I’ve had a longstanding love-hate relationship with the retail juggernaut known as Macy’s. Love, because I spent decades modeling for their catalogs and e-commerce site, working with some of the coolest, kindest people around. Hate, because growing up in the Midwest, shopping at much-beloved department stores like Chicago’s Marshall Field’s and the Dayton’s stores that were central to Minneapolis-St. Paul, a piece of my childhood died when Macy’s—a Cincinnati, Ohio-based entity best known for its New York City flagship—began acquiring those beloved stores, making the Macy’s brand ubiquitous across the nation.

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Call it sentimental, but thinking about those beloved folks I still know from my days working with Macy’s—and the thousands more working in their stores—I truly hate the moment the retailer is now facing. On Monday, it was announced that the loss of sales from COVID-19-related closures of its 775 stores will result in the furlough of most of the retailer’s workforce this week.

As reported by the New York Times:

Macy’s, which also owns Bloomingdale’s and Bluemercury, said on Monday that it has lost “the majority” of its sales because of store closures, which started on March 18 and will persist until the retailer has a “clear line of sight on when it is safe to reopen.”

The company said that as a result, it will furlough the majority of its employees this week. There will be fewer furloughs in the digital business. Macy’s had 130,000 part-time and full-time employees as of Feb. 2.

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The Times reports that a statement from the company indicated it has drawn down its line of credit and canceled several orders, presumably of inventory. A quote from the statement read:

There will be fewer furloughs in our digital business, supporting distribution centers and call centers so we can continue to serve our customers online...At least through May, furloughed colleagues who are enrolled in health benefits will continue to receive coverage with the company covering 100% of the premium. We expect to bring colleagues back on a staggered basis as business resumes.

Macy’s isn’t alone; the Wall Street Journal reports that Gap Brands will also furlough tens of thousands of employees, while Kohl’s, another of my former modeling clients, expects to furlough an estimated 85,000 of its employees to compensate for sales losses, according to CNBC.

But while the crisis caused by the coronavirus may be the catalyst for drastic cuts, CNBC notes that Macy’s and Kohl’s, at least, were among several retailers struggling from lagging revenues prior to the pandemic; in fact, an analysis by independent investment bank Cowen and Co. estimated that the two retailers had approximately five months’ worth of operating expenses while their doors remain closed to shoppers, despite continuing online operations.

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“While these actions have helped, it is not enough,” Macy’s stated in regard to its choice to furlough workers, adding that they were “moving to the absolute minimum workforce needed to maintain basic operations.”

In short, after only two weeks of closures and a $2 trillion stimulus package to shore up our country’s infrastructure, permanent structural changes to the retail landscape are likely already occurring. And if you wonder why I, as a journalist, have chosen to personalize my reporting on this issue, it’s not to humble-brag on my past career; it’s because it is personal—to each of us. It’s been projected that by the time COVID-19 is brought under control we’ll each know at least one person who has been infected by the virus (h/t The Atlantic); many of us already know several. Likewise, many of us already know legions more who have lost their livelihoods as a result of the crisis.

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While retail is often dismissed—especially in the face of a pandemic—as a frivolous and nonessential pursuit (and in many ways, it can be), it is equally a driver of the economy at large and therefore often the first indication of an economic surge or downturn. Add to that the fact that according to a 2019 survey by the U.S. Bureau of Labor Statistics, over 59 percent of department employees are women and nearly 19 percent are black, and perhaps the adjacent crisis of joblessness for these workers amid the coronavirus crisis hits far closer to home. This is personal, and the repercussions of COVID-19 will last far longer than the pandemic itself.

Maiysha Kai is Managing Editor of The Glow Up, co-host of The Root Presents: It's Lit! podcast, and your average Grammy-nominated goddess next door...May I borrow some sugar?

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DISCUSSION

Don’t feel silly about being sentimental. The passing of local retail can be heartbreaking. Here in D.C., a trip to see the windows at the flagship Woodies (Woodward & Lothrop) at Christmas was an annual ritual. I remember my piano teacher getting misty at 80 years old about what it was like for people to make their back-to-school trip from farm county surrounding DC, and have a Tin Roof Sundae at the Tea Room.

Macy’s (in it’s current form) is a mediocre retailer that doesn’t offer anything special, and isn’t integrated into the community the way a previous generation was. My heart breaks for the employees, but no one is going to mourn their passing.