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Retailers pre-emptively shutting stores, hospitality job losses continue

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
25 March 2020 3 minute readShare
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Several retailers have announced pre-emptive store closures as a result of a significant drop-off in trade on the back of the coronavirus pandemic, while news of further hospitality job losses continues.

As the coronavirus pandemic continues to wreak havoc on the Australian economy, more and more retailers are choosing to shut up shop until the coronavirus threat passes. 

Jewellery retailer Michael Hill was among the first to shut its 217 stores in Australia and New Zealand indefinitely, with APG&Co, the owner of Sportscraft, JAG and Saba fashion brands, also announcing closures on Wednesday. 

In a statement published to the Australian Stock Exchange over the weekend, Michael Hill confirmed it has suspended operations of its Australian and New Zealand stores, after closing down its Canadian network on 20 March.

“In Australia, the current social distancing guidelines are not consistent with the day-to-day conduct of our business,” the jewellery retailer said, alluding to a sharp drop-off in sales.

“The drop-off in trade the company has experienced in Australia also reflects a customer base that is of course focused on more immediate issues.”

Confirming that it is taking a “range of urgent measures” to ensure that its costs are reduced, Michael Hill said that team members are being stood down across its markets.

“Team members are being stood down with access to leave entitlements while government support schemes are assessed,” the retailer said, adding that it is also reviewing its corporate support centre with a view of reducing costs further.

According to Michael Hill’s latest annual statement, on the 29 December 2019, it operates 165 stores in Australia, 52 in New Zealand and a further 87 in Canada.

APG&Co follows 

Just days after Michael Hill’s announcement, the CEO of APG&Co conceded to the closure of its Sportscraft, JAG and Saba fashion stores as a preventive measure, noting however that online trading will resume.

“As the COVID-19 situation continues to evolve, we know we must do our part to protect our employees, our loyal customers and the wider community,” said Peter Halkett. 

“We look to the future with optimism and know their long heritage will continue. However, at this time we need to take this action for the wellbeing of our staff, customers and the wider community.”

‘Shopping centres will remain open’

Addressing the nation on Tuesday night, the Prime Minister said that while further restrictions on social gatherings will be enacted, shopping centres will remain open.

He explained that the changes were necessary to stem functions identified as “major transmitting events”, with the closure of retailers dependent on how well social distancing rules are obeyed. 

From midnight on Wednesday, a number of activities and businesses will be shut, including:

  • amusement parks and arcades
  • indoor and outdoor play centres
  • health clubs, fitness centres, yoga, barre, spin facilities, saunas, wellness centres, community and recreation centres
  • public swimming pools
  • galleries, museums, libraries, community centres
  • auction houses
  • real estate auction and open houses
  • in-store beauty therapy, tanning, waxing, nail salons and tattoo parlours, spa and massage parlours
  • food courts within shopping will only be able to sell takeaway

Despite the choice to leave retailers open, the Australian Retailers Association has warned that revenue across the board was down by 30 per cent for March compared to last year, giving rise to the threat of business closure.

“Australian retail is the largest private sector employer in Australia, with 1.3 million people — many of them younger Australians, women, and seniors — in retail jobs, and those jobs are in grave danger of being lost,” ARA executive director Russell Zimmerman said.

Hospitality on lockdown

Having witnessed the impact of a lockdown on the hospitality sector, Mr Zimmerman warned that if retail jobs are lost now, they will be harder to get back later. 

As of 12pm Monday, pubs, clubs, cinemas, entertainment venues, casinos and gyms are just some of the businesses forced to shut their doors. Restaurants and cafés are restricted to takeaway and home delivery only.

The government’s move, intended to slow the spread of the coronavirus, has seen tens of thousands lose their jobs overnight.

Also posting to the ASX, the Star Entertainment Group became the latest on Wednesday to announce job cuts.

It said it has taken a “very difficult, but necessary, decision” to stand down 90 per cent of its approximately 9,000 employees.

“This is a unique environment and one beyond our control in which we’re determined to balance the necessary measures needed to protect the business while considering the considerable human impact to our workforce,” said chairman John O’Neill.  

Government sets up new commission

As stood-down employees and helpless business owners look to the government for answers, the Prime Minister announced on Wednesday the creation of a National COVID-19 Coordination Commission, hinting that its job will be to bring businesses together in an effort to repurpose workforces no longer gainfully employed.

“Whether it’s repurposing manufacturing lines, whether it’s re-tasking workforces, one day taking calls for travel companies now taking calls at Centerlink, ensuring we’re repurposing the workforce effort... There will be many other problems that need solving,” the Prime Minister said.

Retailers pre-emptively shutting stores, hospitality job losses continue
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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