The epidemic is not getting better, and life for American companies is getting harder and harder.
Recently, the second-quarter financial reports of American companies have been released one after another, and the true colors of those industries that have been deeply affected by the epidemic have also been revealed, with the retail industry bearing the brunt.
On Tuesday local time, jeans manufacturer American denim apparel group Levi Strauss (Levis) released its financial report for the second fiscal quarter ending on May 24. Data showed that sales for the current period dropped by 62%.
In addition, on the 8th local time, Brooks Brothers, one of the oldest men’s clothing brand companies in the United States, filed a lawsuit with the court File for bankruptcy protection. The epidemic was the direct cause of its bankruptcy. The 202-year-old company said: “COVID-19 is becoming increasingly disruptive and has caused great losses to their business.”
According to China Fund News, On July 7, American denim apparel brand Levi’s announced its second fiscal quarter results as of May 24. Data show that during the reporting period, the company’s revenue was US$498 million, a year-on-year decrease of 62%. Revenue in the same period last year was US$1.31 billion; net loss was US$364 million (approximately 2.5 billion yuan), and net income in the same period last year was US$29 million. . Adjusted loss per share was 48 cents. The loss was mainly due to restructuring charges of up to $242 million and inventory costs related to disruptions caused by the new coronavirus epidemic.
In terms of e-commerce, Levi’s online business grew by 25%, accounting for approximately 15% of total net revenue, compared with only 5% in the same period last year . Even so, Levi’s said that online sales cannot yet make up for the losses in stores during the epidemic. In terms of regions, sales in the United States fell by 59%, and sales in Europe and Asia fell by 68% and 61% respectively. Levi’s CEO Chip Bergh said that although 90% of stores around the world have reopened, customer traffic and sales are still lagging behind, and full recovery may take some time. He also emphasized that although some green shoots of recovery have begun to be seen, caution still needs to be maintained. Because there may be a second wave of COVID-19 and store closures again.
At the same time, Levi’s announced that it will lay off 15% of its employees globally, affecting about 700 jobs. The company said the move would save Levi’s $100 million annually.
Affected by this news, Levi’s stock fell sharply for two consecutive trading days, and its market value evaporated by US$450 million. The current total market value is approximately US$5 billion.
Not only Levi’s, facing As the COVID-19 epidemic continues to show no improvement, American companies are under increasing pressure on their performance.
Recently, Nike Group announced its financial report for fiscal year 2020. Nike Group’s sales for this fiscal year were US$37.4 billion (approximately 264.7 billion yuan), a year-on-year decrease of 4%. Net profit fell 37% year-on-year to US$2.539 billion. As of the end of May this year, sales in the fourth quarter of fiscal year 2020 were US$6.313 billion, with a loss of US$790 million (approximately 5.6 billion yuan).
Affected by the new crown epidemic, Nike closed about 90% of its stores in North America, Europe and other places very early. In addition, violent incidents such as vandalism, smashing, and looting during the anti-racial discrimination protests that have swept many places in the United States have also dealt a heavy blow to Nike physical stores.
In addition, according to CCTV Finance citing Reuters, due to the impact of the new coronavirus epidemic, the US department store chain Macy’s will lay off about 3,900 employees in corporate management and other departments. Excluding seasonal employees, the layoffs represent approximately 3% of the company’s workforce.
Macy’s said it expects the layoffs to help the company save approximately $365 million in costs in fiscal year 2020. In early February this year, Macy’s had laid off nearly 2,000 employees and planned to close 125 underperforming stores in the next three years. Since the outbreak of the epidemic, most of the group’s 123,000 employees have been on vacation at home.
According to previous reports from Reuters, Macy’s financial report showed an operating loss of nearly US$1 billion in the first quarter of this year. Its shares were even removed from the S&P 500 stock index, and its market value shrank from about $6 billion in mid-February to $1.7 billion.
Nike and Levi’s are great businesses It is large and can still withstand losses, while some other companies have collapsed during the epidemic.
On July 8, local time, Brooks Brothers, a 200-year-old men’s clothing store, filed for bankruptcy. The company has outfitted 40 U.S. presidents and unofficially outfitted Wall Street bankers.
The privately held company has struggled as business attire has become more casual in recent years. But it has been hit hard by the coronavirus pandemic, which has caused demand for suits to plummet. Many employees working from home are opting for much baggier T-shirts and sweatpants instead of pinstripe suits and tailored shirts.
Brooks Brothers filed for bankruptcy in a Delaware court earlier in the day. The company warned in June it would cut nearly 700 jobs in three states and was looking for a buyer as the coronavirus pandemic devastated its business.
The company has been evaluating various strategic options, including potential buyers, but has been struggling to find one.
The retailer is reportedly closing 20% of its 250 U.S. stores. According to the bankruptcy filing, Brooks Brothers has received $75 million in financing to continue operations.
Brooks Brothers opened their first store near Wall Street in 1818. A few years later, it began offering ready-to-wear clothing for men. In 1896, the retailer invented the original button-down polo shirt. Brooks Brothers is the latest iconic retailer to go bankrupt. J.Crew, Neiman Marcus and JCPenney have all filed in recent months, in part due to declining sales due to the pandemic.
GlobalData Retail said in a report on Wednesday that between April and June, Sales of men’s clothing fell 74% year-on-year.
“This deterioration will lessen over time, but with office work, business meetings and social “With reduced activity, demand will be subdued for the rest of 2020 and into 2021,” said Neil Saunders, managing director at Global Data Retail. “This makes Brooks Brothers very vulnerable to a market downturn.” .”</p
