Retailers, Still Reeling From Coronavirus, May Have Just Been Dealt That One-Two Punch

In Midtown Manhattan on Tuesday afternoon, about eight private security guards each with a K9 dog stood in front of Saks’ luxury flagship on Fifth Avenue, where the windows that had just been boarded up in recent days were reinforced with a chain-link wire fence after many of its luxury peers were looted the night before. A few short blocks away, 10 private security guards were stationed outside of Nike
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’s flashy Fifth Avenue location.

Across town, merchants from national chains like Apple
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, Starbucks
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, Target
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, Bed, Bath & Beyond
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to regional and local players including Fairway supermarket and bankrupt Modell’s sporting goods were busy boarding up some of their locations, joining a list of others including LVMH to Uniqlo that only began in the past few days to cover up their windows even as the coronavirus pandemic has kept nonessential stores closed since mid-March in New York. 

As several New York shops could be seen cleaning and boarding up after opportunistic looters ransacked many stores including Macy’s
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Herald Square flagship amid protests over the death of George Floyd in Minneapolis, the social unrest and upheaval seen in New York and many other cities across the U.S. will likely derail the nascent recovery many retailers and other merchants had been hoping for as cities gradually allow non-essential businesses to reopen. It could even throw a fatal punch to those already struggling for survival, including many small independent merchants that reportedly may not even have insurance to cover their property damage and loss. 

As looting and violent protests broke out in cities including New York, Target, CVS and H&M are among national chains that have temporarily shut some of their stores.

In New York, which has implemented a weeklong curfew since Monday, Shake Shack
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’s original outdoor stand at the city’s Madison Square Park that had remained open throughout the coronavirus pandemic has been temporarily closed while 24-hour chains like drugstore Rite Aid
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shut stores in early evenings and grocer Trader Joe’s shortened its hours again only after recently extending them.

These closings and shortened hours came just as the city was set to begin phase one of reopening on June 8 to allow nonessential stores to open for curbside or in-store pickup. 

“It’s gonna be a hard haul for all of us,” Tilman Fertitta, CEO of restaurant group Landry’s that owns brands including Bubba Gump Shrimp, Rainforest Cafe and Morton’s The Steakhouse, said on CNBC Tuesday. “It’s gonna be a long time for New York and other big cities to come back…The protests are happening  in urban areas where a lot of restaurants and retail were just opening up literally in the last 7 days. … I’ve been in New York when there were protests but you didn’t have the few bad apples out there trying to cause the issue.” 

Fertitta, who is also the owner of Houston Rockets, said his 600-plus restaurant group had to close 83 outlets at some point on Monday while at least half a dozen locations were “vandalized.”  

“It’s really a disappointment as people are just starting to go out again,” he said on CNBC. “The roads were desolate last night in Houston.”

While well-resourced retailers like Target could well weather any business fallout of the looting and store closings, many other retailers may not have the same luck. The pandemic has already  led to a nearly 90% decline in clothing sales in April from a year earlier and a plunge of nearly half of the business each for department stores and restaurants during the same time. Macy’s and Nordstrom
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are among chains that have announced some store closing plans that will lead to job cuts. Others including J. Crew, J.C. Penney and Neiman Marcus have filed for bankruptcy protection while Modell’s was set to host liquidation sales after its stores reopen. 

As brands seek to strike a sensitive tone and stand with the protesters in championing for reform and justice, the perfect storm hitting the retail and food service sectors may turn out to be too big for many to weather. 

Related on Forbes: Expect Peet’s Coffee to be a bigger contender against Starbucks.

Related on Forbes: Coronavirus isn’t hurting all discretionary sales