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Retailers Wade Through the Uncertainty

HOM Furniture, Bachman’s among the latest Minnesota stores to temporarily shut down; industry leaders lobby for tax relief.

Retailers Wade Through the Uncertainty
Patina temporarily closed its eight Twin Cities locations.

While Minnesota’s restaurants, gyms, and salons were ordered by the governor to close earlier this week, retailers find themselves in limbo—facing dwindling sales, but unsure whether they’ll qualify for some of the emergency benefits that kick in during a mandated shut down since for now, they are technically choosing to close, or trying to stay open with limited operations. 

Bachman’s planned to temporarily shutter its stores at the close of business Friday. Galleria—down to just a dozen open stores—called it on Thursday, as did its largest tenant, Gabberts. The furniture store’s parent company HOM Furniture decided to close all of its stores at the end of the day Thursday through April 1. Mall of America closed, as did Southdale Center. Meanwhile, other regional malls remain open with limited hours, even though anchors including Macy’s and Nordstrom have closed. Dozens upon dozens of boutiques have closed including Patina gift shops, with eight Twin Cities locations, and Edina-based Evereve, which operates more than 90 stores around the country. MartinPatrick 3 in the North Loop remains open, but is focusing outreach efforts on curbside pickup and phone orders, and offering 25 percent off everything—including gift cards.

“We are being as safe as possible,” said MartinPatrick 3 CEO Dana Swindler, “and doing our damnedest to get through this.”

As the number of COVID-19 cases increases along with warnings to stay home and the growing possibility of more restrictions, it’s an uphill battle. 

Hillary’s, a Hopkins gift shop specializing in personalized items, typically takes many of its orders from corporate clients by phone or online, but even those have slowed to a crawl, owner Hillary Feder said.

“I’ve checked with my insurance and there is not insurance for this type of business interruption,” Feder said. In her business owners roundtable meeting last week, talk centered on the mounting concern. “Eight of the 12 of us had already reached out to insurance providers and all had the same answer: no coverage.” 

But there will likely be loans and payment extensions to ease burden. Bruce Nustad, president of the
Minnesota Retailers Association, outlined some of the efforts underway that pertain to retailers.

 
  • Negotiated landlord rent payment delay

  • Short term, low interest bank and credit union loans

  • Delayed sales and use tax payment. Originally due Friday, this can now be paid to the state of Minnesota without penalty by April 20 

  • New flexibility in the state unemployment insurance program to allow employees to collect 50 percent of wages immediately when employer makes changes, including temporarily closing

  • Waiver of unemployment five-week benefit limit for business owners that have been paying in to the state 

  • Federal emergency sick leave program with eventual reimbursement for employers with under 500 employees, signed into law Thursday

  • Federal extension of Family and Medical Leave Act for companies with less than 500 employees and eventual reimbursement for employers

  • Federal efforts underway to create new low interest U.S. Small Business Administration loans 

“We’re working on a number of things to help with liquidity,” said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation. “Liquidity is quite frankly what we’re looking for right now. The retailers I’ve talked to are trying not to lay off employees, but they’ve got fixed costs like rent and utilities.” 

Legislation currently making its way through congress could allow retailers to postpone payroll taxes and make it possible to carry losses back to the prior year’s taxable income to be eligible for a refund. “It’s a very common recessionary tool,” Bernstein said.

The NRF offers up-to-date news and policy information on its website

At his briefing on Friday, Gov. Tim Walz was again asked about the possibility of mandatory mall and “non-essential” store closures. He said that action was being considered. 

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