Retailers have furloughed nearly 1 million workers this week amid an unprecedented shutdown of shopping in America, according to data compiled by Bloomberg.

Neiman Marcus Group toRoss Stores Inc. are among the latest major chains to announce they’re halting pay for their workers while maintaining benefits. Nonessential retail stores are closed across much of the U.S. in a bid to halt the spread of coronavirus. The total of furloughed workers now stands at about 900,000.

25,200 in U.S.Most new cases today

-26% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.12 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

Piano - Client Dashboard

An error has occurred

m

Bloomberg Business

Get the best of Bloomberg delivered to your inbox daily

Registering...

Thank you for subscribing.

Millions more workers are at risk of being furloughed or fired the more re-opening dates get pushed back. Most retailers had hoped to return to business as usual in April and guaranteed two weeks of pay for workers in March, but with coronavirus cases and fatalities still on the rise, there’s no telling when that could happen. Tailored Brands Inc., owner of Men’s Wearhouse and JoS. A. Bank, for example, has already committed to stay shut until at least May.

The retail industry employs nearly 16 million people, according to the U.S. Bureau of Labor Statistics. Store salespeople account for about 5 million of those jobs.

But it’s not just the sales-floor staff. J.C. Penney Co., Kohl’s Corp. and Ascena Retail Group, the owner of Ann Taylor and Lane Bryant, are among the companies that are also suspending some corporate employees in early April.

Furloughed, Not Fired

About 10 million Americans have applied for unemployment benefits over the past two weeks, a reflection of the far-reaching economic shutdown taking place across the country. Last week alone saw jobless claims hit a record 6.65 million, according to figures released by the U.S. Labor Department on Thursday.

Lawmakers arebetting that mass furloughs will be better than mass layoffs. The federal government’s $2 trillion stimulus package last week is meant to limit economic fallout from the outbreak by letting furloughed workers get paid by unemployment benefits from their state and federal governments. The U.S. has boosted unemployment assistance and will provide cash payments to many taxpayers.

Aside from essential shops like grocery stores and pharmacies, retailers began shutting down en masse in mid-March, withnearly 50,000 shops closing in 10 days. By the end of the month, total store closures reached more than 200,000, according to GlobalData Retail. Foot traffic to stores has ground to a near total halt.

Even though furloughs are meant to be temporary, it’s unclear whether workers will have jobs to return to once the crisis calms.

Bloomberg Intelligence analyst Poonam Goyal estimates that retail sales may fall by more than 30% as a result of the outbreak, a blow that may threaten the survival of some apparel and department stores that were already struggling.

Source: Read Full Article