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Gap Inc. said Monday that it will continue to operate its various chains of stores in the U.S. and Canada at reduced hours.
Gap’s GPS, -26.09% portfolio of brands includes the namesake, Old Navy and Banana Republic.
Old Navy will be open from 11 a.m. seven days per week, closing at 8 p.m. Monday through Saturday and 6 p.m. on Sunday.
Athleta stores will be open at 10 a.m. to 6 p.m. Monday through Saturday, and Sunday from 11 a.m. to 6 p.m.
All other stores including Banana Republic, Janie and Jack and Gap will be open at 11 a.m. seven days per week, closing at 7 p.m. Monday through Saturday and 6 p.m. on Sunday.
Read: Walmart cuts store hours until further notice in response to coronavirus pandemic
The parent company says it will adhere to recommendations from local officials and health authorities, as well “location-based factors” such as access to public transportation.
According to a letter posted by Sonia Syngal, Gap’s incoming chief executive, the clothing retailer is taking lessons from its teams in Asia, “who have been weathering this crisis over the past several months” and has closed more than 100 stores.
Continued pay policies have been put in place for employees who are affected.
AMC Entertainment Holdings Inc. AMC, -18.17% also said it wouldn’t be closing its movie theaters, but rather would limit ticket availability for films to 50 people, though it is adhering to government mandates.
Gap stock is down nearly 25% in Monday trading and has sunk 68% for the past year. AMC stock has fallen 17.7% in Monday trading and is down 81.8% over the last 12 months.
The S&P 500 index SPX, -9.22% is down 12.4% over the past year.
See: Amazon ‘out-of-stocks’ rise and deliveries taking longer due to coronavirus-related demand
Movie theater stocks have been getting crushed in Monday trading as state governments have taken steps to reduce capacity at various businesses and consumers stay home.
State and local governments are putting policies in place to restrict businesses, such as making restaurants take-out and delivery only, in an effort to promote “social distancing” and curb the spread of coronavirus.
Other retailers, like Walmart Inc. WMT, -4.65% , Kroger Co. KR, +4.53% and Target Corp. TGT, -4.41%, which sell household necessities and hygiene products, have remained open, also at reduced hours. UBS analysts say these sort of consumables retailers will fare better than others in the current uncertain environment.
With consumers spending on coronavirus-related items, Morgan Stanley upgraded Costco Wholesale Corp. COST, -4.50% to overweight.
However, many clothing retailers, including Nike Inc. NKE, -7.45%, Under Armour Inc. UA, -8.97% UAA, -11.70% and Lululemon Athletica Inc. LULU, -19.56% have closed stores across North America for a period of time in response to the pandemic.
Last week, Gap reported fourth-quarter results that beat expectations, though the company said it is “impossible” to anticipate the impact of the coronavirus outbreak.
Read: Gap, Banana Republic at risk as coronavirus gives shoppers one more reason to avoid the mall
“It is increasingly clear that the retail impact is beginning to significantly impact retail trends in the U.S. (as well as Europe),” wrote Wells Fargo in a note published Monday. Analysts say mall traffic fell 45% over the weekend, and they note the store closures and cut in operating hours across the category.
“It’s clear that current outlooks do not account for this significantly (and increasingly) negative catalyst,” analysts said. “Given the already meaningful traffic declines, the mounting government response and several retailers recent store closure announcements, it seems highly reasonable to expect U.S. retail to struggle for the next one-to-two quarters across our space.”
Wells Fargo cut estimates across its universe of retailers and brands, which includes off-price retailer Burlington Stores Inc. BURL, -21.83%, Ugg parent Deckers Outdoor Corp. DECK, -11.99% and Coach parent Tapestry Inc. TPR, -24.29% Analysts also slashed price targets for the retailers and brands it covers.
UBS analysts also took a pessimistic look at softlines retail, forecasting as much as another 53% decline in stocks in a bear case.
“Our bear case is Covid-19 causes earnings declines worse than the ’08-’09 financial crisis, not only due to shoppers avoiding stores and the overall macro slowdown, but also because it catalyzes multiple retail bankruptcies and global inventory dislocations,” UBS wrote.
The UBS bear case assumes that Covid-19 spreads until March 2021.
