Another 5.2 million people were rushed onto the U.S. unemployment rolls last week as the coronavirus shutdown clamped down on the economy.
Over the past four weeks, a total of 22 million people have applied for jobless benefits as businesses close to slow the spread of COVID-19 and people hunker down at home.
In reporting the figures, the Labor Department placed the “insured unemployment rate” for the week ended April 4 at 8.2 percent.
Investors were expecting the bad news and, while the market spent most of the day in the red, the Dow Jones Industrial Average staged a late-day comeback ending ahead 0.1 percent, or 33.33 points, to 23,537.68
But many fashion companies were still posting significant declines. Among them were Iconix Brand Group Inc., 14.6 percent to 57 cents; Simon Property Group Inc., 13.2 percent to $53.10; G-III Apparel Group, 8.6 percent to $8.91; Capri Holdings; Revlon Inc., 8.3 percent to $11.44, and J.C. Penney Co. Inc., 7.3 percent to 25 cents.
Markets were mixed in Europe, but the luxury leaders were showing small gains. LVMH Moët Hennessy Louis Vuitton was up 0.2 percent to 342.80 euros while Kering shares increased 0.5 percent to 477.25 euros.
On the U.S. unemployment front, retailers were again prominent in the weekly surge.
While Walmart, Target, pharmacies and other companies remain open because they sell essential goods — from canned tuna to medicines — most fashion retailers have closed and sent workers home. Retailers generally held on to workers for a few weeks, but then moved to furloughs. (Some stronger companies have been able to hold on to their staffs, including VF Corp. and Lululemon Athletica Inc.)
The shutdown has underscored just how tight retail finances are and how dependent companies are on a steady flow of cash week to week. Now the companies that were on watch lists as financially strained are hitting the wall. J.C. Penney missed an interest payment Wednesday and is using its 30-day grace period to rush for options. Neiman Marcus Group is also said to have alerted vendors that it wouldn’t make a similar interest payment.
The specter of bankruptcy now hovers over both companies.
And they could be just at the beginning of the wave that came when True Religion filed for Chapter 11 protection from creditors on Monday.
J.C. Penney, Neiman’s, Rite Aid Corp., J. Crew Group Inc., Ascena Retail Group Inc. and Academy together account for 77 percent of the $24 billion of apparel and retail debt that Moody’s Investor Service deemed to be of “poor standing” heading into the shutdown.
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