Upscale retailers including Nordstrom Inc (JWN.N), privately-owned Saks Fifth Avenue and jeweler Tiffany & Co (TIF.N), reopened their large New York City flagship locations on Wednesday with reassuring signage and oversized jars of sanitizer to calm shoppers worried about cleanliness.
Curbing the spread of coronavirus is not the only challenge the retailers will face in coming weeks as the most populous and hardest-hit city in the United States reopens, experts said.
With record-low tourism, and many New Yorkers working from out-of-town locations, the retailers’ pool of potential shoppers is much smaller now, even in the generally slower summer months.
Craig Johnson of Customer Growth Partners said that a lack of spending by tourists could bring a 9% to 12% average hit to upscale department stores’ revenue compared with the year earlier. Foreign tourists are traditionally major spenders at department stores and luxury boutiques in New York City, as well as in Los Angeles and Miami.
Spokespeople for Nordstrom, Saks and Tiffany were not immediately available for comment.
Many non-essential retailers have pulled annual forecasts amid the virus outbreak, unsure of what the future may hold and how much people will want to spend on things like toys, apparel and accessories as well as home improvement.
Over the last several months, they dangled deep discounts online, targeting quarantined shoppers, and have wrestled with mountains of unsold inventory.
NPD Group’s chief industry analyst Marshal Cohen said he is paying attention to how many stores are open across a retailers’ fleet, how they are performing and, as their stores come back, how their online businesses are affected.
“It’s no longer good enough to look at how sales are versus a year ago. We need to look now week by week,” said Cohen, adding that he’s also keeping tabs on restaurant traffic and unemployment figures.
Retailers’ moves to ensure shopper safety include curbside pickup, virtual shopping and “appointment only” consultations.
Several retailers – including Saks, Nordstrom and Tiffany – decided to open their doors on Wednesday even though it became fair game on Monday to allow in-store retail in New York City.
“While we began preparing for reopening from the day we closed the flagship, we made the decision to open on Wednesday to ensure we had ample time to train our associates on our health and safety protocols and new services prior to opening,” a Saks spokeswoman said.
On Monday, Macy’s Inc (M.N) opened its 34th Street flagship store in Manhattan. Around 3 p.m. that day, there were only a handful of shoppers, way outnumbered by staff on the floor, according to a Reuters photographer.
Many New Yorkers have fled the city for the Hamptons and Montauk, both of which are on Long Island and farther along in the re-opening process.
Saks in May started offering same-day delivery to anywhere in the Hamptons. Customers can work with a style advisor to place orders via email or phone. Orders placed by 10 a.m. will arrive by that evening for a fee of $25, a company spokeswoman said.
Robert Burke, founder of luxury retail consultancy Robert Burke Associates, said what better a time for people to rethink retail in tourist hot-spots outside of Manhattan.
“They have got a full audience with residents and renters this summer more than ever,” Burke said.
“It is even more difficult to get into the top restaurants and there is a pent-up desire of people to start the summer and just shop.”
