It is no secret that the fortunes of department stores have been dwindling, amid changing consumer preferences and the rise of e-commerce. As the Covid-19 pandemic forces retailers worldwide to shut their doors, the department store model of sprawling stores and large inventories that span every imaginable category has been put under additional strain.
Is this the final blow for the format? Already, in the United States, giants like Neiman Marcus and JC Penney have filed for bankruptcy. Nordstrom announced the closure of 16 stores, while Macy’s is seeking financing amid a projected first-quarter operating loss of around US$1 billion (S$1.4 billion).
Retail sales in March, before the start of the circuit breaker, saw sales at department stores drop by 39 per cent year-on-year – one of the largest declines among retail categories tracked by the Singapore Department of Statistics.
In Singapore, department stores such as Tangs and Metro are mostly keeping mum about whether the impact of the outbreak, which is expected to reshape the retail sector, will lead to closures. But the outlook is bleak.
Retail sales in March, before the start of the circuit breaker that forced most retail stores to shut for the duration, registered the sharpest drop in almost 22 years. They fell 13 per cent from the same period last year.