Times Square virtually empty on March 23. Photo: Lev Radin/Pacific Press/LightRocket via Getty Images
In just over a week, more than 47,000 chain stores across the U.S. have shut their doors as retailers have taken extreme measures to help slow the spread of the coronavirus pandemic, Bloomberg reports.
Why it matters: "Most have pledged to remain closed to the public for at least two weeks, but they may stay closed for much longer. In the same period, small retail businesses throughout the U.S. also hit pause on their physical locations but are not included in this list."
On another front: A separate Bloomberg report finds that major U.S. retail and restaurant chains, including Mattress Firm and Subway, have told landlords they will withhold or pay only reduced rent starting in April.
The intrigue: A snowball effect could be underway. Landlords can’t afford to stop collecting rent for long, with many property owners sitting on large piles of debt.
- "The U.S. relief packages being considered don’t directly address rents. But the Federal Reserve’s actions may give banks the leeway to defer mortgage payments, allowing property owners to delay rent," the story notes.
- "It’s also unclear if retailers can declare a so-called force majeure, a contract clause that covers highly unusual events, and if landlords could then make the same case to insurers."
Quick take: “In the space of a week, the retail landscape has changed from being fairly normalized to being absolutely disrupted beyond what we’ve ever seen before outside of the Second World War,” Neil Saunders, managing director of GlobalData Retail, told Bloomberg.
Go deeper: 96% of small business owners are already feeling coronavirus impact