The COVID-19 stimulus package signed into law on Friday will benefit U.S. retail by expanding the availability of loans to businesses of all sizes, among other measures.
But some retail leaders feel the government should be doing more to help the industry, which employs one in four working Americans—roughly 32 million people.
Yesterday, L.L. Bean CEO Stephen Smith said in a video interview with CNBC retail reporter Courtney Reagan that increased support and attention is due to midsize companies that are “nonessential,” in particular (many jewelry brands and retailers would fall under this description).
“I think it’s a really serious situation, and I actually don’t think it’s getting enough attention,” Smith said. “Small mom-and-pops—a lot of stimulus has been focused on these smaller businesses. But all of those [midsize] apparel retailers are struggling mightily with full rent, full payroll, and if they’re store-based, close to zero sales.” Those retailers, he says, “need more attention in the next stimulus package.”
Sonia Syngal, CEO of Gap Inc., which also owns Old Navy, Banana Republic, and Athleta, told The New York Times last week that imminent intervention is necessary and predicted that “there will be tens of millions of job losses in the industry. People don’t understand how deeply fashion—which is often seen as nonessential—is connected to the U.S. economy.”
Without government-backed relief, “our industry will fail,” clothing designer Tory Burch told the outlet for the same article. Burch led a coalition for the Council of Fashion Designers of America that sent a letter to Congress asking for help last week.
Retail’s watchdogs and lobby groups have been pushing for increased governmental support for retailers of all sizes.
A letter sent March 21 to congressional leaders from the National Retail Federation—cosigned by the Jewelers Vigilance Committee, the Women’s Jewelry Association, and Jewelers of America, among others—discussed the destructive socioeconomic impacts currently threatening the industry as the weeks tick by with brick-and-mortar stores shuttered in much of the United States.
“The economic harm from social distancing and mandatory store closures is real,” the letter read. “Layoffs and economic hardship will surely follow, particularly for smaller, specialty retailers and brands. The biggest single issue facing the industry right now is liquidity, and federal stimulus efforts must be swift and flexible enough to address the urgent need for access to credit to keep these businesses afloat. Research from the National Retail Federation predicts that the U.S. retail sector could see a reduction of 20% in retail sales over a period of three months based on similar declines in China. This reduction in retail sales would result in a total estimated loss of $429.9 billion when you consider both direct and indirect sales. Most notably, this sharp decline in retail activity would place 1.7 million American jobs in peril.”
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