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Friday, January 15, 2021

Back to School issues with bare shelves?

U.S. shoppers may find barer shelves during back-to-school shopping because of the coronavirus outbreak. Chinese factories are a key supplier for U.S. retailers, and many shut down because of the virus. They’re slowly ramping up again now, but there may still be production delays, Cowen & Co. analysts say. If that lasts past June, that’s a problem because toys, clothes and other items for back-to-school are typically shipped in summer. Back-to-school shopping, which runs from late July to September, is retailers’ busiest time apart from the winter holidays. Any shortages would hurt sales.

Cowen estimates that Kohl’s, Macy’s, Target and J.C. Penney get 20% to 30% of their goods from China. Macy’s did not dispute the figure, while Penney just said it was “high.” The other companies did not reply to questions. If goods are delayed and are shipped by air instead of boat in order to get to stores faster, that could also add to merchants‘ costs, hurting their profits, Cowen said. Most U.S. retailers have not factored the virus into their financial outlooks because of uncertainty about how long it will last and how much it will affect global trade and consumers’ willingness to go shopping in public places.

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