Tilly’s Updates Market on Coronavirus Impacts
Tilly’s released a newsy update Friday afternoon including opening plans for about two dozen stores and details about how the coronavirus crisis impacted Q1 sales.
The company will open 26 stores in mid-May in Arizona, Florida, Texas and Utah. It does not yet know when it can open stores in California, which account for 40% of Tilly’s store base, and in other states.
“We anticipate customer traffic and sales activity will remain well below normal levels following the reopening of stores, which we expect will negatively impact our near-term profitability and cash flows from our reopened stores,” CEO Ed Thomas said in a statement.
Tilly’s also said total Q1 sales fell 41%.
Sales at stores dropped 57% for the quarter ending May 2. Physical stores were open to the public for only 45 days of the 91 days in the quarter. Tilly’s also missed out on the key spring break and Easter time sales.
E-commerce was a bright spot, however, with sales up 54%.
Because of store closures, inventories were up 26.2% at the end of the quarter. The company said it has canceled a substantial majority of its merchandise orders from April through July and has significantly reduced its future inventory commitments through the rest of the year.
In addition, Tilly’s has furloughed 90% of its employees and cut executive pay. That has saved $1.4 million per week in payroll costs.
The company has also not paid rent on its stores in April and May and is in talks with landlords.
As stores begin to open, Tilly’s is implementing the following safety protocols:
- Training its employees on the new health and safety protocols
- Conducting health screenings and temperature checks for its employees working in stores
- Encouraging proper social distancing with signs, floor decals, and limiting the number of employees and customers in a store at any one time, as required by government guidelines
- Providing face coverings for employees
- Implementing regular cleaning and sanitation policies in its stores
- Installing plexiglass protective barriers at point-of-sale checkout
- Keeping all fitting rooms closed to the public
- Offering buy-online-pickup-in-store and curbside pickup options in select stores
- Operating with reduced hours.
The company ended the quarter with $110.7 million in cash.
Currently, Tilly’s has 239 stores in 33 states.