Sports apparel company Fanatics is now producing masks and gowns instead of baseball jerseys at its 360,000-square-foot factory in Easton, Pa. The company is one of a growing number of clothing companies and fashion houses turning their talents to making or sourcing protective gear for health care workers during the pandemic.
Lululemon Athletica reported a 9% same-store sales increase in the quarter ending Feb. 2, but said business has dropped off in the second week of this month amid the coronavirus outbreak. The workout wear retailer has reopened almost all of its stores in China, and it expects stores in the US and Europe to stay closed until April 5.
Consumers stuck at home are working on DIY projects and replacing appliances, a trend that's driving sales across categories at Lowe's, CEO Marvin Ellison said. The retailer will pay one-time bonuses of $300 to full-time employees and $150 to part-time staff, offer up to four weeks of paid leave to high-risk employees, and continue recruiting to fill 53,000 seasonal jobs this spring.
Supermarkets and general merchandise retailers that have remained open during the coronavirus pandemic continue to institute new protections for employees. Hy-Vee and others have added or plan to add sneeze guards in checkout lanes, Target employees are cleaning checkout lanes between each customer and a growing number of retailers are asking customers to leave reusable bags at home.
A unit of AG Mortgage Investment Trust is suing the Royal Bank of Canada in an effort to stop the bank from auctioning off commercial mortgage bonds. As of Wednesday, RBC was reportedly seeking bids on hundreds of millions of dollars worth of debt seized from its clients.
Mortgage REITs are in a difficult situation right now because mortgage bonds are losing value and their lenders are making margin calls. As these mortgage REITs sell their holdings, it can push prices lower for other mortgage bonds.
The Federal Reserve's most recent announcement of programs to support financial markets extends its purchase program to include agency CMBS. These purchases are aimed at improving liquidity in this market, which had come under stress last week and contributed to funding pressures for investors, including several mREITs. Early indications suggest these interventions are beginning to stabilize the market.
Recent news on both the pandemic and its impact on the economy has worsened, and the main question today is how long the critical phase will last. Nareit economist Calvin Schnure notes that factors like operating performance and profitability are less important today than having the resources to be resilient through the crisis. With leverage ratios at or near the lowest in two decades and ample sources of liquid assets and credit lines, REITs are prepared for the challenges ahead.
As travelers stay at home due to the coronavirus, hotels both large and small have shuttered or curtailed operations. Individual hotel operators, many of them franchisees, are at risk because they hold much of the $350 billion in mortgages and other loans owned by the industry.
Movie theater operators are facing potential defaults if they remain shuttered for an extended period of time. One strategy operators could pursue would be to seek rent concessions from landlords, who may be reluctant to push out tenants without replacements.