A growing number of retail giants closed their doors on Thursday and restaurants heeded calls for social distancing amid Europe’s coronavirus pandemic, in the largest mass closure yet.
In the restaurant world Zizzi and Ask Italian are to close their sites temporarily as national restaurant chains start to shut in the face of the coronavirus outbreak. It’s one of the largest mass closures yet.
Burberry has taken action in light of the growing pandemic with more than 60% of its stores in Europe, the Middle East, India and Africa closing as governments across several countries force high streets to shut their doors to prevent the further spread of coronavirus.
Spanish fashion giant Zara has closed all its stores worldwide after a partial closure on Wednesday. Owner Inditex made the move just a day after it said UK stores would remain open.
Zizzi and ASK close all 308 UK restaurants. The Front entrance to Zizzi Italian Restaurant in London Street, Basingstoke
Steve Holmes, chief executive officer of Azzurri, who own Zizzi and Ask Italian, among other restaurants, said the decision was made in light of the Government’s recommendation to avoid public meetings and with ‘deepest regret’.
He said: ‘For many of our people, this will mean not working until we can safely reopen our sites and this has been the hardest part of our decision.’
Burberry warned that its store sales were likely to take a 30% hit in the fourth quarter of the financial year, as 85% of US stores also closed.
It warned that more closures are expected in the coming days, even as trading improves in China, where most of the company’s sites have reopened.
Ask Italian will also close their sites temporarily. Stratford upon Avon branch pictured
Chief executive Marco Gobbetti said: ‘Since our February update, the material negative effect of Covid-19 on luxury demand has intensified and is now impacting the industry in all regions.
‘Our primary concern is the global health emergency and we continue to take every precaution to help prevent the spread of the virus and ensure the safety and wellbeing of our employees, partners and customers.
‘We are implementing mitigating actions to contain our costs and protect our financial position, underpinned by our strong balance sheet. We remain confident in our strategy and the strength of our brand, and I am exceptionally proud of our teams’ resilience and commitment.’
Meanwhile Retail chain Next has warned it is preparing for a ‘significant’ trading downturn amid the coronavirus pandemic as it revealed full-price sales have tumbled by 30% in recent days.
Burberry’s move comes as more governments force stores to shut their doors
The group said stress tests showed the business could ‘comfortably sustain’ more than £1 billion loss of sales over the full year – including sales declines of up to 100% in some weeks during the peak of the outbreak.
Online sales are likely to fare better than its 498 stores due to social distancing measures, but it gave a bleak outlook for trading in the coming months, cautioning that ‘people do not buy a new outfit to stay at home’.
The comments came as Next reported a better-than-expected 0.8% rise in pre-tax profits to £728.5 million for the year to January as overall full-price brand sales lifted 4%.
Next chief executive Lord Simon Wolfson said: ‘When the pandemic first appeared in China, we assumed that the threat was to our supply chain.
Zara has now closed all of its stores after previously shutting only some of them Pictured: Zara store in Barcelona
‘It is now very clear that the risk to demand is by far the greatest challenge we face and we need to prepare for a significant downturn in sales for the duration of the pandemic.’
He added: ‘Online sales are likely to fare better than retail but will also suffer significant losses – people do not buy a new outfit to stay at home.’
Recent trading results have showed the toll taken on sales as Britain has begun to go into lockdown, with total sales swinging from a 2.1% rise in the final week of January to an 8.8% drop last week and 30% plunge since Sunday.
It cautioned that sales could even fall by 100% for as long as a month in its worst case scenario, before gradually improving as the outbreak passes – leaving overall sales 53% lower over the affected period.
But the group said this is seen as an ‘overly pessimistic’ sales scenario.
In the event of a prolonged closure period and no government assistance, Next cautioned it may be forced to take ‘radical’ action on wages to help cut costs.
But it hopes it can offset a severe trading hit by not requiring staff to work more than their contracted hours and, in the short term, not replacing leavers.
Inditex, the Spanish owner of Zara, warned the virus has had a ‘very significant impact’ on its operations.
The group, which also runs other retailers including Pull & Bear and Bershka, made the shift to close all its stores after initially closing just some of its outlets in 39 markets across the globe.
Retail chain Next has warned it is preparing for a ‘significant’ trading downturn
It said it is currently ‘too early’ to quantify the future impact of the outbreak on its operations for the rest of the year, but it is ‘fully confident’ in the strength and flexibility of its business model.
Group sales tumbled by 24.1 per cent in the first two weeks of March as it was impacted by the raft of store closures.
It said it would therefore book a provision of 287 million euros (£262.9million) as the outbreak reduces the value of its inventory for the spring/summer period.
Inditex also postponed its decision over whether to pay out a dividend until later in the year.
The update came as the retail giant reported a jump in sales and earnings for the year to January 31.
It said net sales increased by 8 per cent to 28.3 billion euros (£25.9billion) as it was boosted by a 23 per cent surge in online sales.
Meanwhile, the company’s earnings before tax and interest increased to 7.6 billion euros (£7billion) from 5.5 billion euros (£5billion) in the previous year.
Dozens of retailers are currently struggling to cope with a sharp drop-off in sales as the public are being urged to stay home and self-isolate to stop the virus spreading.
Earlier this week, the UK Government announced a £320billion package of loans and injections of £20billion into firms that face going bust.
But business groups have since said that more help is needed.
It comes as fashion retailer Superdry also said it has closed most of its European stores.
In the US and UK – where their outlets currently remain open – shopping visits were down by a quarter.
Inditex, the Spanish owner of the high street retailer, warned the pandemic has had a ‘very significant impact’ on its operations. Pictured: Zara store in LA
Beales announced its final 11 department stores will shut two weeks early after the outbreak meant trading took a nosedive.
In the restaurant world Zizzi and Ask Italian are to close their sites temporarily.
Azzurri Group, which runs the Italian chains as well as Coco di Mama, confirmed that its 300-plus sites will shut their doors from Thursday.
The move is one of the largest mass closures yet, but comes as other dining chains halt operations for sit-down customers.
The dining group runs 167 Zizzi restaurants, 111 Ask Italian restaurants and a further 30 Coco di Mama sites.
The company said it currently plans for 117 Ask and Zizzi sites to be open for delivery.
Meanwhile, hospitality giant Whitbread is also set to temporarily close around 400 restaurant sites from Friday night in response to the virus.
The move will affect its chains such as Brewers Fayre, Beefeater and Bar + Block.
A Whitbread spokeswoman said: ‘Whitbread has entered these unprecedented times in a very strong financial position, and we are taking decisive action to protect the interests of our guests, our staff and our business.
‘Following the recent, updated Government advice on social distancing, we have taken the decision to temporarily close our restaurants commencing Friday night. All of our Premier Inn hotels will remain open.’
A host of other smaller restaurant groups have also revealed closures, with Vietnamese brand Pho closing the doors of its 30 sites to focus on home delivery.
Burger chain Byron said it has also closed its operations to the public completely and is moving to delivery-only.
Brasserie Blanc, the chain of 17 French restaurants founded by TV chef Raymond Blanc, has also closed its operations completely for the near future.
Other chains, such as Itsu, have announced they have moved to takeaway-only models to reduce the time customers spend at their sites.
Sushi restaurant chain Yo! said that it had taken the decision to close 54 of its restaurants ‘for the time being’. The remaining 16 will remain open ‘while this is in our control’, but will offer restricted hours and a reduced menu.
§ Italian restaurant chain Prezzo announced it would temporarily close its restaurants. The move came after the government said people should avoid restaurants. ‘It was always going to be question of when, not if, we would need to close our doors for a time,’ the company said.
On Thursday, pub company Young & Co said it expects its pubs to close ‘at some point’, but is hopeful it will only be for a short period.
The group said its pubs will continue to operate ‘as we feel they offer local communities a place of sanctuary in these uncertain and worrying times’.
Brewer and pub group rival Shepherd Neame said it is ‘inevitable that trading will deteriorate rapidly’ as its sites continue to trade.
However, the company said it had suspended the collection of rent receipts from its pub tenants in a bid to support them during the testing period.
Nationwide the number of confirmed cases stands at 2,626 with 108 deaths. Over 900 people have been diagnosed with coronavirus in London – more than a third of the UK total of 2,626.
Yesterday Boris Johnson announced testing will be ramped up to 25,000 a day after coming under scathing criticism for letting thousands go undiagnosed. Only 5,000 people were being swabbed daily for COVID-19 previously.
London faces plunging deeper into lockdown within days – and potentially with just 12 hours’ notice – amid fears the ‘superspreader city’ is driving the UK’s coronavirus outbreak.
After the daily death rate doubled to 33 yesterday, residents in the capital are set for tighter restrictions on their movements – with signs the government will urge people to stay at home unless it is absolutely essential.