V.F. Corporation (VFC - Free Report) joins the bandwagon of retailers shutting down stores to prevent further spread of coronavirus. The company has temporarily closed all retail stores across North America from Mar 16 till Apr 5. During this time, all employees will continue to receive their salaries and other job-related benefits.
Further, the company has closed its corporate and brand offices in North America till Apr 5. All office employees have been asked to work remotely. These temporary measures will be extended depending on the overall situation in the country. This way of social distancing is expected to safeguard employees and customers as well as curb the virus spread.
Prior to this, V.F. Corp. had undertaken similar actions in the EMEA and the Asia Pacific. Notably, the company has shuttered all offices and stores in Europe until further notice. Meanwhile, its stores in the U.K. remain open but for limited hours.
In the Asia Pacific, most of its stores and offices have been closed. However, the company’s offices in Greater China are resuming and nearly 90% of stores have now started operating. Additionally, offices and stores in South Korea, Japan, Hong Kong and Taiwan continue to operate, though office employees are working remotely and certain stores are open for reduced hours.
Similarly, other major retailers, such as Levi Strauss (LEVI - Free Report) , Nike (NKE - Free Report) and lululemon (LULU - Free Report) , have closed stores in the United States and other countries from Mar 16 to 27, to combat the spread of coronavirus in communities across the world. Notably, Nike announced the closure of all company-owned stores in multiple countries around the world, including the United States, Canada, Western Europe, Australia and New Zealand. Further, lululemon has closed all stores in North America and Europe. Also, Levi Strauss announced the closure of all company-owned and operated stores across North America and Canada.
V.F. Corp. has also witnessed supply-chain disruptions stemming from the current COVID-19 scenario. To combat this, it is on track with diversification efforts, including re-directing manufacturing and materials sourcing. As of now, the company is uncertain of the material impacts of COVID-19 on its results and likely to announce the same during the fiscal fourt quarter results in May 2020.
Due to such downsides, this Zacks Rank #4 (Sell) company’s shares have slumped 42.2% in the past three months compared with the industry’s decline of 36.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Experts believe that this announcement came after U.S. President Trump’s declaration of a health emergency on Mar 13, in the wake of the rapid spread of this deadly virus. Later, the Federal Reserve announced an interest rate cut to 0-0.25% in order to support the economy that has been badly hit by this outbreak. This will boost margins and lower the occurrence of inflation. Also, it revealed plans to buy $500 billion of Treasurys and $200 billion of agency-backed mortgage securities to lower the impacts of COVID-19 on the economy.
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