As they reopen stores full of merchandise from March that no one will want in June, retailers are struggling to make room for summer goods trapped in overstuffed warehouses. With five big retailers having filed for bankruptcy in May, some of the industry’s survivors can’t get financial backing for their holiday season orders — prompting an urgent appeal to the Treasury Department and Federal Reserve for help, the Washington Post reported. Even though stores were closed for much of March and April, huge amounts of shoes, shirts, suits and swimwear poured into the U.S. from global supply chains that continued churning despite the pandemic. Retailers have to decide what to do with their leftover March goods and a glut of seasonal gear while they place their bets on what consumer spending will look like in six months. Without a Treasury or Fed guarantee of its routine financing, the retail industry could suffer “a commercial credit crisis that threatens to seize up our economy and stall the safe restart in its infancy," the American Apparel and Footwear Association will warn Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome H. Powell in a letter early this week. The trade group represents more than 1,000 name-brand companies, including manufacturers and retailers. Read more.
In related news, many retailers and restaurants, already crippled by the coronavirus pandemic, are grappling with damage to their properties and new closures following protests sparked by the death of George Floyd that have sometimes turned violent, the Wall Street Journal reported. From Minneapolis, where Floyd died while handcuffed and in police custody, to California and Georgia, big and small retailers and restaurants have shut locations in anticipation of violence or are working to rebuild after destruction over the past week. Target Corp., Walmart Inc., Nike Inc. and small family businesses have collectively closed hundreds of locations or are recovering from looting and physical damage related to protests. Adidas said that it was temporarily closing all its U.S. stores, while Amazon.com Inc. said it had scaled back or adjusted delivery routes in a handful of cities to protect employees. Many executives and business owners expressed solidarity with protesters, who object to broader issues of racism and social justice. Read more. (Subscription required.)
