Retailers are eager to reopen, but it remains to be seen if customers are ready to return: Under Armour CEO Patrik Frisk expects the reopening process to be gradual, and he acknowledged in an interview with CNBC that the company may have to re-close some stores as the crisis continues. In comparison, Tailored Brands will open 300 stores by Memorial Day, while Patagonia is remaining cautious and waiting until at least June before it begins to reopen.
Under Armour stated that the “pace and timing of store openings, and traffic patterns when the stores re-open, remain highly uncertain” in its Q1 2020 results. The retailer followed a “gradual comeback” model in China, and Frisk expects to follow a similar approach in the U.S.
“We are going to see a gradual opening, and I think there’s going to be a few ups and downs in terms of potentially shutting down stores, reopening stores,” said Frisk in the CNBC interview. “It will be gradual, we believe.”
An extended recovery could be painful for Under Armour, which posted Q1 revenue declines across its three major product categories:
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- Apparel: Down 23% to $598 million;
- Footwear: Down 28% to $210 million; and
- Accessories: Down 17% to $68 million.
Additionally, North American sales fell 28% and total sales fell 23%. The retailer’s management warned that the worst could still be ahead, with sales declines as high as 60% in Q2 2020 due to low demand for sneakers and workout clothes.
Under Armour plans to cut approximately $325 million in operating expenses to help weather the continuing crisis. Cost-saving initiatives include limiting broader marketing activations until the company has greater visibility into the magnitude of the virus’ impact on consumer demand and behavior; furloughs in both stores and distribution centers; and postponing planned capital expenditures.
Tailored Brands To Move Faster, While Patagonia Takes A Cautious Approach
Tailored Brands is taking a more optimistic, if still phased, approach to the reopening process, with approximately 300 Men’s Wearhouse, Jos. A. Bank and K&G stores opening in May — including a portion slated to open in Georgia and Texas this week. The company also is reviewing plans to reopen its Moores Clothing for Men stores in Canada.
Like other retailers, Tailored Brands has implemented temperature checks, mask usage and limited store traffic. The company also has rolled out a new curbside pickup program at all three brands.
“We are pleased to bring our store teams safely back to work and to be there for our customers,” said Dinesh Lathi, President and CEO of Tailored Brands in a statement. “The safety and health of our employees, customers and communities remains our highest priority and will guide us through the reopening process. Our phased approach allows us to test, learn and iterate at each step along the way. Accordingly, we will measure customer traffic and response to determine the appropriate pace of reopening and staffing.”
Patagonia is taking a slower approach. It was among the first wave of retailers to start shutting their doors in March, and may be one of the last to reopen: the retailer doesn’t plan to open any locations for in-store shopping until June at the earliest, and it could even wait until the fall or even early winter, CEO Rose Marcario told The New York Times. However, the company won’t remain dormant: it’s launching curbside pickup at 10 stores on May 20 to help shoppers use stores in a safe fashion.
“We’re going to be cautious about the way we open up — we’re not going to necessarily follow what the state decrees are,” said Marcario. “There are some areas that aren’t as hard hit, but I don’t think you can assume those places won’t see a surge in cases if people stop social-distancing.”
