Situation looking grim, say retailers as malls get shut down, footfalls dry up

Several states have ordered shutdown of shopping malls etc in order to prevent a further outbreak of the coronavirus. This has resulted in shares of retailers getting affected.

Shares of Future Retail, V-Mart Retail and Trent have fallen between 25 and 50 percent over the past two months, as investors brace for the impact of the shutdowns on the industry.

“For the retail space, it is a brave call. The situation on the ground today

But since some of the states and some of the bigger cities the malls have been closed or cinema halls have been closed. it will take quite a bit of time for the things to come back,” said Amnish Aggarwal.

Aggarwal added that it would be difficult to forecast the impact on retailers’ earnings.

“We don’t know to what extent the virus is going to impact the country. So maybe another month or two months are going to be testing times for that and after that it will require some time for the consumers to start flocking into these places. As of now, for anyone to say that how much will be the earnings cut, it will be too premature a call,” he said.

V-Mart’s Agarwal added that he was looking at a very Q1. “A lot of events are getting cancelled, marriages may get affected. A lot of ceremonies are getting cancelled. So all the reasons why people will shop are not there. It is going to be difficult in Q1.”