The comeback is still more of a crawl back — and millions more found themselves without a paycheck and seeking assistance last week.
More than 2.1 million people filed for unemployment benefits in the U.S. last week as the coronavirus crisis continued to exact a numbing economic toll, according to the Labor Department’s latest reading on jobless claims.
Over the past 10 weeks, a total of 41 million Americans have rushed to apply for unemployment benefits, which have been expanded by Washington, but ultimately cannot sustain the economy indefinitely.
While some of the people who received assistance have returned to work, many of the businesses that closed in the interest of social distancing will not reopen or will be operating with smaller staffs. American Airlines, for instance, cut 30 percent of its management and support staff on Wednesday, eliminating about 5,000 jobs, according to reports.
“We are in the midst of an economic downturn without modern precedent,” said Jerome Powell, chair of the Federal Reserve, in a speech last week. “It was sudden, and it is severe. It has already erased the job gains of the past decade and has inflicted acute pain across the country.”
Retailers that furloughed workers are starting to call them back, but stores are working with occupancy restrictions and traffic is slow (although retailers have said shoppers who do come to the store are looking to buy, boosting conversions).
Companies with a firmer footing are now trying to press their advantage.
Patrice Louvet, chief executive officer of Ralph Lauren Corp., told WWD on Wednesday that: “Given the [company’s] strong foundation, we really believe we have an opportunity to grow market share through this period and as we come out of it. We’re going to continue our brand elevation journey, continue to play offense.”
There is also another group looking to play some offense — the off-price retailers that scoop up excess inventory and sell at a discount.
And right now, the sector has access to an unprecedented glut of inventory in the retail system.
Even so, there is still a sense of some caution, even among the off-price crowd.
Michael O’Sullivan, ceo of Burlington Stores Inc., which reported first-quarter results Thursday, said: “There is clearly pent-up demand, and our customers are responding positively to our clearance strategy. That said, we do not know how long this will continue, as sales could slow down as we sell through our clearance merchandise.
“But as an off-price retailer, we are excited by the chance to turn our inventory and to pursue great opportunistic buys in what we expect will be a very strong off-price buying environment,” O’Sullivan said. “There is considerable uncertainty ahead, but we are current on our accounts payable, we have lean inventories, and we have ample liquidity. Therefore, we believe that we are well-positioned to chase the sales trend or to pull back based on whatever situation we face in the coming months.”
Burlington’s sales fell 51 percent to $798 million in the first quarter and the retailer registered a net loss of $334 million.