man walks by closed nordstrom store in seattle

Unprecedented, downright horrible or just another distressing sign of the new COVID-19 reality. 

When it comes to characterizing the coronavirus fallout on fashion’s finances, any of these will do. 

During April — the height of the lockdown to slow the outbreak —  U.S. department store sales dropped 47 percent and apparel and accessories specialty stores were off a jaw-dropping 89 percent, according to the Commerce Department. March was cut in half and retail only started to limp back in May.

When individual companies started reporting quarterly results, there was just no way to sugar coat the bottom line. Even with furloughs and expenses slashed, the loss of sales was too great. Many had to write down the value of their inventory. Even when companies only registered a few weeks of shutdown in their fiscal quarters, they still registered steep losses. (Profits this time, through, were most reserved for the “essential” players, such as Walmart Inc.)

A WWD tally of 11 U.S. companies reporting losses last month showed them awash in $3.8 billion worth of red ink. 

If there is a silver lining, it’s that now is one of those rare instances that investors can look past profits — or the lack thereof. 

But investors still don’t quite know where to turn, prompting big swings in the market day by day. On Friday, the mood ended on a sour note. Among the fashion decliners were Nordstrom Inc., down 11 percent to $16.13; PVH Corp., 8.3 percent to $45.47; Capri Holdings, 8.1 percent to $15.04; Gap Inc., 7.2 percent to $8.90; Macy’s Inc., 6.9 percent to $6.36; Ralph Lauren Corp., 5.6 percent to $75.51; VF Corp., 4.6 percent to $56.10, and Kohl’s Corp., 4.5 percent to $19.22.

Cash is what matters most now. Some have run out — the bankrupt Neiman Marcus Group, J. Crew Group and J.C. Penney Co. Inc. — but most other high-profile companies have secured a kitty to hopefully see them through. Macy’s is one of the last still racing to shore up its balance sheet with a complicated bond sale and loan agreement that started to come together last week. 

But the latest rounds of quarterly updates — which were heavy on assurances of liquidity — were instructive in other ways as well. Retailers touted how they’re being more creative and agile than ever by pivoting quickly to curbside pick up. They also used the opportunity to emphasize their online businesses, to highlight how they’re staying closer to consumers and to offer optimistic — if long-term — projections. 

Here, four key takeaways from reports last month.


When the shutdown came, Nordstrom had a big e-commerce business to fall back on and bring in new customers. 

Nordstrom is known as a high-touch department store, but the company drew nearly 60 percent of its $15 billion in sales last year from its $5 billion e-commerce business as well as the Rack off-price unit. 

While sales fell 40 percent in the first-quarter, the online business kept growing. “While our stores were temporarily closed, our e-commerce business had more than 50 percent growth in customers who are new to Nordstrom,” said chief executive officer Erik Nordstrom. 

And although 16 of the company’s full-line stores are open, Nordstrom is standing strong with off-price. 

The ceo said, “Off-price is just a huge part of our future.”

“The Nordstrom business is continuing to shift from a predominantly mall-based business to mobile and off-price,” he said. 

Off-pricers are seen as having an advantage in the market as customers come out and start bargain hunting.

Marshalls and T.J. Maxx parent TJX Cos. Inc. was among the hardest hit in the shutdown, logging a nearly $887.8 million net loss given its reliance on brick-and-mortar. But the company is seen as one of the big winners in the aftermath of the crisis. 

Ernie Herrman, TJX’s ceo and president, said, “The marketplace is loaded with inventory, and I am convinced that we’ll have access to plenty of high-quality, branded merchandise to offer consumers the categories they want when they shop us. Our buyers have been in touch with many of our vendors throughout this crisis and are staying on top of market and consumer trends.”


VF Corp. came into the COVID-19 crisis well capitalized and with a portfolio of well-known brands — Vans, The North Face and Timberland — and plans to keep growing and become more e-commerce centric.

That’s all still the same, just supercharged.

Steve Rendle, chairman, president and ceo, touted the company’s beefed up “fortress balance sheet” even as it logged a $483.8 million quarterly loss.

“It’s times like these that serve as a purifying fire, separating the best companies from the rest,” Rendle said. “We have prepared ourselves well for a time such as this. Our strong brands, our financial and supply chain disciplines, coupled with our fortress balance sheet, allows us to weather almost any storm. I’m confident that VF will emerge from this crisis in a position of strength, prepared to accelerate at a time when many are under tremendous financial strain and unable to adequately invest in their business.”


From consumers dashing in for a curbside pick up to a digital process that whips around the world, speed has come into much sharper focus in fashion. 

“We’ve been able to do things in weeks and days that typically would have taken us months or years to do,” said Patrice Louvet, Ralph Lauren Corp.’s president and ceo. “This includes our ability to work remotely around the world, continuing to digitize our end-to-end value chain and also driving a culture of cost discipline, which is obviously critical in the current environment that we’re in.”


Jeff Gennette, chairman and ceo of Macy’s, said the company was lining up enough money to fund operations and cover its debt maturities for a couple of years. The firm has not reported its final first-quarter numbers yet, but expects operating losses ranging from $905 million to $1.11 billion.

“We have run a variety of scenarios for the future store reopenings and recovery sales in order to stress test our liquidity needs,” Gennette said. Macy’s doesn’t expect sales to stabilize until well into 2021 or 2022 in some of those scenarios. 

Along the way, there will also be opportunities, given the spate of bankruptcies in the industry.

“We see there’s about $10 billion worth of opportunity that’s up for grabs right now based on what’s going on with the competitive climate,” Gennette said. “That amount may grow.”


Fashion’s Tough Quarter

The COVID-19 shutdown hit fashion hard, with many companies taking big inventory writedowns that led to even steeper losses. Even firms registering only a couple weeks of the U.S. shutdown in their latest quarter were mired in red ink.

Company Quarter Ended Net Losses*
TJX Cos. Inc. 5/2 -$887.5
Kohl’s Corp. 5/2 -$541
Nordstrom Inc. 5/2 -$521
VF Corp. 3/28 -$483.8
Ross Stores Inc. 5/2 -$305.8
L Brands Inc. 5/2 -$296.9
Ralph Lauren Corp. 3/28 -$249
Abercrombie & Fitch Co. 5/2 -$244.1
Urban Outfitters Inc. 4/30 -$138.4
Ulta Beauty 5/2 -$78.5
The RealReal 3/31 -$38.3
Source: company reports

*in millions