What happened
Shares of Macy's (M +4.73%), Kohl's (KSS 4.18%), Gap (GPS +0.76%), Foot Locker (FL +0.00%), Urban Outfitters (URBN 2.51%), and Abercrombie & Fitch (ANF 0.43%) all fell more than 6% on Thursday, as investors grew increasingly concerned about the COVID-19 coronavirus epidemic.
So what
Many retailers have been weakened in recent years by the relentless growth of e-commerce. As consumer spending has increasingly shifted to online channels, many traditional stores have experienced declining traffic and sales trends. Nowhere was this more prevalent than in malls and strip malls, many of which have been particularly hard hit by the growth of online retail.
Now it appears that mall-based retailers are facing another fearsome threat: the COVID-19 coronavirus outbreak. Fears that shoppers will avoid crowded malls in hopes of protecting themselves from the disease led many investors to sell their shares on Thursday.
Image source: Getty Images.
Now what
Abercrombie & Fitch said on Wednesday that it would lose as much as $80 million in sales in fiscal 2020 due to COVID-19. Other retailers are likely to begin to quantify the impact of the disease in the days ahead, and it might be larger than many investors currently expect. Moreover, with coronavirus-related fears unlikely to abate any time soon, retail stock prices could remain under pressure in the coming weeks.
