Lululemon Closes Stores Globally To Curb Coronavirus Spread

Due to the rapid spread of COVID-19, lululemon athletica inc. (NASDAQ:LULU) followed the footsteps of major retailers by closing all stores across North America and Europe, starting from today till Mar 27. However, customers can shop online from lululemon.com.

Prior to this, the yoga apparel retailer canceled yoga classes and reduced store hours in North America with the rising cases of coronavirus infections. In February, the company had shut down 38 stores in China following the challenging situation related to the pandemic.

Speaking of store closures, retailers including Nike (NYSE:NKE) , Under Armour (NYSE:UAA) and Abercrombie (NYSE:ANF) have taken the same path to prevent further spread of the deadly virus. Meanwhile, all retailers have noted that online stores will continue to operate.

Coming back to the news, the company’s employees will continue to receive their salary based on the number of hours they are scheduled to work for and will also have access to its Global Pay Relief plan. Per the plan, any employee of lululemon suffering from coronavirus or in need of quarantine measures will be provided salary protection for 14 days.

Although shares of this Zacks Rank #3 (Hold) company have lost 20.7% in the past three months, it outperformed the industry’s decline of 35.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Moving on, experts believe that this announcement came after U.S. President Trump’s declaration of health emergency on Mar 13, in the wake of the rapid spread of this deadly virus. The declaration frees up to $50 billion in federal funds for emergency relief operations. It also eases regulations on the provision of healthcare and could speed up testing.

Keeping in these lines, Federal Reserve announced interest rate cuts to 0-0.25% in order to support the economy that has been badly hit by this outbreak. This will boost margins and lower the occurrence of inflation. Also, it revealed plans to buy $500 billion of Treasurys and $200 billion of agency-backed mortgage securities to lower the impacts of COVID-19 on the economy.

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