Covid-19 News Updates

Administrators to close all Colette by Colette stores

Voluntary administrators steering the fortunes of retailer Colette by Colette Hayman (CBCH) have opted to close the company's remaining 93 stores in Australia, putting health first in response to the Covid-19 pandemic.

The closures will affect 210 permanent staff as well as casuals, who were all advised today that business would close at the end of trading hours until further notice. 

The handbag and accessories retailer had 33 of its stores closed in February as part of a restructuring plan to sell the 105-store business.

Since then the company has already shut down outlets in New Zealand in adherence to strict government social distancing measures,

"Until today, we have been able to effectively manage shopfront operations in what is a rapidly changing public health and trading environment," says administrator Vaughan Strawbridge of Deloitte Restructuring Services.

"But the reality is that Covid-19 presents a health risk in a retail environment, and without being able to guarantee a safe environment for store employees, and with their health a priority, we have had to make this decision to cease trading across the 93 store network in Australia.

"These are extraordinary times, and there is also no certainty that many retail operators in Australia will be able to continue trading amidst so much uncertainty and with public health measures changing so frequently."

Employees are being stood down with access to certain leave entitlements and every support possible to ensure they can access relevant government support services.

Online sales and order deliveries are not affected.

"We hope to re-open the bricks and mortar business when this unprecedented public health threat has passed, but when that will be, we cannot be certain at this time," he said.

Updated at 5:16pm AEDT on 26 March 2020.

SA businesses to benefit from $650 million rescue package

Payroll and land tax relief, the waiver of fees and charges, and a new community and jobs fund are the major pillars of South Australia's $650 million stimulus package.

The Marshall Government says individual businesses and industry sectors facing collapse will reap the benefits of the relief fund as the state teeters on the edge of losing thousands of jobs.

Finalised this afternoon, the package includes the waiving of liquor licence fees for hard-hit hotels, restaurants, cafes and clubs.

South Australia has now committed $1 billion in its fight to save local business. The total spend also includes the establishment of two new funds: a $300 million Business and Jobs Support Fund and a $250 million Community and Jobs Support Fund.

In addition to support for businesses the State Government will provide a one off $500 payment and bring forward the 2020-21 'Cost of Living Concession' for households receiving the Centrelink JobSeeker Payment.

Premier Steven Marshall hopes the $650 million spend will help businesses survive the Covid-19 financial crisis.

"In the space of a few weeks, in some cases overnight, once thriving local businesses and their staff are now facing uncertain futures through no fault of their own and my Government is stepping up to make sure we see them through this period," says Marshall.

"Our Jobs Rescue Package is aimed squarely at keeping as many hardworking South Australians in jobs as possible. For those who have been already let go, we want to see them become re-skilled and employed elsewhere.

"And by either waiving or deferring fees, charges and taxes, we are easing the cash flow burden on businesses at a time when they need it most."

The $650 million stimulus package includes:

Payroll tax relief (Up to $60 million of savings to business)

• 6-month waiver for all businesses with an annual payroll (grouped) up to $4 million
• Eligible businesses won't have to pay any payroll tax from April to September
• This measure is expected to assist up to 2,400 businesses and save them up to $84,000 over the six months (average saving $25,000)
• Employers with grouped annual wages above $4 million able to defer payroll tax payments for 6 months on demonstration of significant impacts on cash flow of coronavirus
• Around 4,300 businesses will be able to access this payroll deferral and is expected to increase overall cash flow by around $580 million.

Land tax relief (Up to $13 million in additional savings)

• From July, the Government's land tax reforms will kick in, delivering $189m in savings to investors and landlords over the next three years.
• Under the new measures, individuals and businesses with outstanding quarterly bills for 2019-20 able to defer payments for 6 months (up to 28,000 private land tax ownerships will benefit)
• For 2020-21 Land Tax Transition Fund relief will be increased from 50% to 100% based on existing relief criteria guidelines saving some investors up to $50,000

Fees and Charges

• Waiver of liquor licence fees for 2020-21 for those hotels, restaurants, cafes and clubs forced to close as a result of new social distancing restrictions

$300 million Business and Jobs Support Fund

• A fund to support individual businesses and industry sectors directly affected by coronavirus, and face potential collapse and the loss of thousands of jobs as a result

$250 million Community and Jobs Fund

• A fund to support community organisations, sporting, arts and recreational bodies, non-profit organisations as well as some industry sectors whose operations have been impacted by the coronavirus
• Will also help with training of South Australians seeking new skills and employment and to assist organisations meet increased demand for services including emergency relief.

Cost of Living Concessions (An estimated additional benefit of about $30 million)

• A once-off boost of $500 and bring forward the 2020-21 'Cost of Living Concession' for households who are receiving the Centrelink JobSeeker Payment, assisting those who are unemployed or lose their jobs as a result of the coronavirus restrictions.
• For eligible homeowners, their 2020-21 payment of $215.10 will now become $715.10. Eligible tenants will receive $607.60.

Access to accrued leave for public sector workforce

• If a public servant has a family member who has lost their job and moved onto Commonwealth benefits, they will be able to receive their accrued leave down to a limit of 2 retained weeks (annual and long service leave)

For more information, and to apply for the funds, email: [email protected] or [email protected].

Updated at 2:54PM AEDT on 26 March 2020.

US Senate passes US$2.2 trillion Covid-19 stimulus

An economic stimulus package now estimated to be worth US$2.2 trillion (AUD$3.7 trillion) has been unanimously passed in the US Senate with 96 votes, and will go to the House where a vote is expected on Friday.

The Washington Post reports the bill includes a $500 billion business lending program, a $367 billion employee retention fund for small businesses, and will also translate to payments of $1,200 to most American adults and $500 for most children.

In response, President Donald Trump, who has indicated he will sign the measure, tweeted "congratulations AMERICA!".

The proposal equates to more than 9 per cent of US annual gross domestic product (GDP). In comparison, Australia's $189 billion stimulus package is worth around 10 per cent of our country's GDP last year.

This proposed stimulus compares to an US$831 billion stimulus package implemented by the Obama Administration in response to the global financial crisis (GFC), more commonly known as the Great Recession in the United States.

The Washington Post reports there have been more than 13,000 new cases of the coronavirus in the United States since Tuesday, while many are expecting Louisiana will become the next epicentre of the virus, in large part due to transmissions that likely occurred during Mardi Gras festivities in New Orleans. 

More to come......

Updated at 4pm AEDT on 26 March 2020.

MedAdvisor launches fast-tracked medicine delivery app

The developer of a home delivery service for prescription medicines hopes to ease the burden placed on pharmacies and help those most vulnerable to Covid-19.

Listed digital medication management company MedAdvisor (ASX: MDR) has fast-tracked the rollout of its medicine delivery service, which it believes will assist in slowing the spread of the novel coronavirus.

Patients can now order, pay and request delivery of their medication all from within the MedAdvisor app.

CEO Robert Read says MedAdvisor's role in managing the coronavirus crisis is vitally important.

"MedAdvisor is playing a critical role in remote medicines management in Australia during this health crisis," says Read.

"Our tools allow patients to track, manage and order their medications whilst at home. Now with the ability to pay in advance and request delivery from your pharmacy it can streamline the workflow for community pharmacies when managing patients remotely."

The service is particularly important considering Australians need to stay home as much as practicable and only leave the house to buy essential goods. One less reason to leave the house, especially for those who are particularly vulnerable to the novel coronavirus, can only help to flatten the curve.

"By fast-tracking the launch of the delivery service, MedAdvisor is helping to relieve pressure on pharmacists who are struggling at the front line of this crisis, further protecting patients from unnecessary exposure, and providing ongoing access to critical medications," says MedAdvisor.

"Over 30 per cent of MedAdvisor's App users are over 60 years old and may be at higher risk if they were to contract COVID-19 so providing a remote medicines toolkit is critical."

In addition, MedAdvisor's delivery service will facilitate the ability for pharmacies to access the $25 million cash pool for medication deliveries announced by the Federal Government on 10 March 2020.

The Federal Government is putting $5 toward every delivery to participating pharmacies to enable those who cannot leave their homes or under financial stress to save costs on delivery.

MedAdvisor will allow pharmacies to utilise their own delivery service or MedAdvisor's delivery partner.

Now that 'Phase 1' of MedAdvisor's launch of its delivery service is under way the company will be moving into 'Phase 2' during which it will be leveraging third-party delivery partner Kings Transport to conduct same day deliveries.

All prescription, over-the-counter or front-of-shop medicines can be ordered for delivery on MedAdvisor's app, with pharmacies retaining discretion over certain medication they may deem unsuitable for delivery.

Temporary measures are in place to provide no-contact delivery to avoid unnecessary contact with vulnerable patients.

Shares in MedAdvisor are up 21.21 per cent to $0.40 per share at 2:23PM AEDT.

Updated at 3:20PM AEDT on 26 March 2020.

Premier shutters all stores at Peter Alexander, Just Jeans, Portmans, Smiggle, Jay Jays, Dotti

Retail investor Premier Investments (ASX: PMV) will temporarily close all retail stores from 6pm (local time) tonight, leaving thousands of employees affected.

The impact of the store closures will mean more than 9,000 employees in Premier Investments retail portfolio will be stood down.

Premier Investments owns a number of prominent Australian retail brands including The Just Group, Jay Jays, Just Jeans, Portmans, Jacqui E, Peter Alexander, Dotti, and Smiggle.

A small number of employees will continue to work to perform limited essential work, and according to the company's latest financial figures it has approximately $199.8 million in cash to weather the storm.

In Australia and New Zealand close to 70 per cent of Premier's stores are already in holdover or with leases expiring in 2020, giving the group a great deal of flexibility. 

The company has put in place special arrangements for employees to access accrued annual leave and long service leave entitlements to reduce the impact of closures over time, but the affected employees will not be paid during this period.

CEO of Premier Investments Mark McInnes (pictured left with Premier Investments chairman Solomon Lew) has voluntarily decided to work from home without pay or accessing any other entitlements for the period of the shutdown until 22 April 2020.

Additionally, the entire Just Group executive team have been stood down and have agreed to work from home when required with either no pay or reduced leave entitlements.

Premier's non-executive directors will also not receive any remuneration during this period.

For the duration of the shutdown Premier says it intends to not pay rent globally for the duration of the shutdown. This is because in Australia and New Zealand close to 70 per cent of stores are already in holdover or with leases expiring in 2020, providing the group with maximum flexibility.

At a glance:

• Premier Investments will close all retail stores. This includes The Just Group, Jay Jays, Just Jeans, Portmans, Jacqui E, Peter Alexander, Dotti, and Smiggle.
• 9,000 employees will be stood down
• CEO Mark McInnes has voluntarily decided to without pay or accessing any other entitlements for the period of the shutdown until 22 April 2020
• Just Group executive team have been stood down and have agreed to work when required with either no pay or reduced leave entitlements
• The company intends to not pay rent globally for the duration of the shutdown
• The company says it is in a strong position to ride out the Covid-19 shutdown, with a strong balance sheet with minimal debt and a strong cash position

"This is the hardest decision ever made by Premier our team are our family and we want to do everything we can to keep them employed, but we believe that it is necessary and the right decision for them, their families, our customers, and the country," says Premier Investments.

"Premier would like to thank its team members and loyal customers for their understanding and patience in relation to this difficult decision."

The company says it is in a strong position to ride out the Covid-19 shutdown, with a strong balance sheet with minimal debt and a strong cash position, seven distinctive brands that delivered a record 1H20 result, and an experienced management team and board.

"Premier's brands and company are strong and with the support of all our employees we will overcome this global health pandemic and bounce back and thrive at the earliest opportunity," says Premier Investments.

Updated at 11:46AM AEDT on 26 March 2020.

Gym equipment and self-sufficiency goods a boon for Super Retail Group

The Covid-19 crisis has presented opportunities for Super Retail Group (ASX: SUL), which has seen total sales growth of 2.7 per cent this financial year despite the impact of bushfire-related closures over the summer. 

Supercheap Auto and BCF stores in particular have benefited from increased demand for essential and self-sufficiency products.

These include portable gas and fuels, camping stoves, batteries, gas refills, generators, refrigeration equipment, hygiene products (sanitisers and wipes), water filters, water-purifying products, portable toilets and solar energy panels.

And while apparel sales have been negatively affected at the company's sports retail chain Rebel, there has been an uplift in sales in personal fitness and gym equipment following the government's direction to close gyms in Australia.

As at week 38, the group has notched a 21 per cent increase in online sales - a category that represents around 9 per cent of total sales.

SUL advises all its Australian stores continue to trade, and all its offshore suppliers are operational with its supply chain continuing to function normally.

In New Zealand however, in adherence government guidelines Super Retail Group has closed its 45 Supercheap Auto and 36 Macpac stores for a minimum period of four weeks.

As a precaution the company has cancelled its dividend of 21.5 cents per share.

"Covid-19 and its impact on our business and the community is uncertain and changing rapidly," says CEO and managing director Anthony Heraghty.

"We are taking all actions available to us to best navigate the Group through this difficult period. We remain focused on continuing to provide essential and self-sufficiency products to our valued customers.

"We have implemented a number of safety measures including the adoption of flexible working arrangements, travel restrictions, and increased hygiene and safety protocols in our stores and support offices."

Updated at 11:40am AEDT on 26 March 2020.

6,000 Flight Centre staff stood down, 35 per cent of stores to close globally

Travel agency Flight Centre (ASX: FLT) will stand down 30 per cent of its global workforce, including 3,800 Australian employees, as the tourism sector languishes in limbo.

Covid-19 has had a dramatic effect on the global tourism sector, with many countries closing borders to help slow the spread of the coronavirus.

Flight Centre has felt this downturn crush its operations, with total transaction value tracking at 20 to 30 per cent of normal levels globally this month.

This has led to management making the tough call of reducing its global workforce by 30 per cent, with 6,000 support and sales roles to be temporarily or permanently stood down globally including 3,800 people in Australia.

The travel agency intends to bring the stood-down workforce back to work once travel restrictions are lifted and demand for tourism increases again.

Stood-down employees will be offered the opportunity to take up a call centre job in the meantime; Flight Centre says it has been engaging with other potential employees to secure immediate access to more than 10,000 sales and call centre vacancies. Those who take up one of these roles will be able to return to Flight Centre once conditions improve.

The company has also been working with the government to give employees who exhaust their accrued leave entitlements rapid access to benefits and support schemes if they are unable to find short-term temporary roles.

"We have been forced to make extremely difficult decisions, including temporarily standing down some of our people and cancelling our interim dividend, with a view to preserving more jobs for the future," says Flight Centre managing director Graham Turner.

"These people that we are temporarily standing down are a valuable part of our company and, where possible, we aim to bring them back to work as soon as restrictions are lifted and as demand starts to increase."

After previously announcing the closure of 100 under-performing retail shops the company says it has accelerated and extended its leisure shop closure plans globally and could now close around 30 per cent of its outlets across multiple brands in Australia and 35 per cent of leisure shops globally over the next few months.

"Changes to these plans are likely if market conditions deteriorate further, if restrictions are in place for an extended period or if demand rebounds more rapidly than currently expected," says Flight Centre.

The company's board and senior executives will forego 50 per cent of pay until at least the end of FY20 and short-term incentive payments for the remainder of 2020.

The group's $15 million-per-month sales and marketing spend has been suspended to preserve cash while travellers are effectively unable to take off either domestically or internationally.

Because of the impact on its income FLT has begun renegotiating rental agreements with landlords. These discussions to date have been positive according to FLT, with potential cost savings including rent-free periods and more flexible trading hours on the table.

"We are also making other changes to reduce costs, preserve cash and help the company overcome the current challenges that our industry and almost all businesses now face," says Turner.

"In making any changes, we will be extremely conscious of the impact on all stakeholders and will seek solutions that minimise the effects on any one group."

"We will also be conscious of the need to make changes that allow us to successfully overcome this short-term challenge, but do not harm our culture or prevent us from thriving into the future."

At a glance:

• 6,000 support and sales roles will either be stood down temporarily or, in some instances, will become redundant
• FLT will initially retain up to 70% of its global workforce. The company is assessing the timing and nature of further reductions.
• In Australia 3,800 people in sales and support roles will temporarily stand-down in the near-term.
• FLT could now close about 30% of its leisure outlets across multiple brands in Australia and 35% of its leisure shops globally over the next few months.
• FLT has initiated immediate 50% pay reductions for senior executives and Board members at least until the end of FY20. Executives will also forgo all short-term incentive payments for the year.
• FLT has moved to significantly reduce occupancy costs by renegotiating rental agreements with landlords.  FLT has pursued potential cost savings including rent-free periods and more flexible trading hours.
• $15 million-per month marketing spend suspended

The remaining Flight Centre team is currently engaged in assisting customers to make it back to their homes; a difficult task considering many airlines have effectively cancelled all international travel and borders are effectively shut both inbound and outbound.

A team is in place to consider all options, including booking charter flights, for customers and other travellers that no longer have access to commercial flights. The company says major areas of concern, given the loss or reduction in scheduled services, includes South America, South Africa and the United Kingdom.

"We are dealing with unprecedented restrictions and extraordinary circumstances that are having a significant impact on our customers, people, suppliers and all other stakeholders," says Turner.

"People are effectively unable to travel in the near-term, either domestically or internationally, and some are actually unable to be repatriated to their home countries, which is affecting thousands of people and is a problem that we're working to help solve."

"Within this climate, our people have been working tirelessly to help our customers amend their plans, but unfortunately the vast proportion of the work that they would normally undertake has now been stopped."

The Covid-19 outbreak has destroyed what would have otherwise been a record 2020 fiscal year for Flight Centre.

The company generated $12.4 billion in first half TTV and broke monthly records in both January and February.

Despite the downturn in business Flight Centre says it is undertaking steps to maintain a robust balance sheet and liquidity position. 

"The company is well progressed in pursuing relevant initiatives and will update the market in due course, at which time it also expects to end the voluntary Australian Securities Exchange suspension that is currently in place," says Flight Centre.

Updated at 10:45AM AEDT on 26 March 2020.

Lovisa closes all stores in Australia, NZ and South Africa

Jewellery retailer Lovisa (ASX: LOV) has now closed the majority of its 400 stores worldwide in response to the government's containment measures against Covid-19.

The company announced today it had temporarily closed all its stores in Australia, New Zealand and South Africa.

The move follows decisions in France, Spain, Malaysia, the USA and UK, where Lovisa stores have been closed over the past week.

Singapore is the only company-owned market where stores continue to trade.

"Whilst some governments have provided timing for the current containment measures to end, we are not currently in a position to know when our stores will be able to re-open," the group said.

"As a result, the company has taken a number of important actions to manage the cost structure of the business, including the stand-down of store teams in all markets where our stores are closed, and reduction of headcount in our support teams across the world, with a combination of temporary stand-downs and redundancies to ensure teams are appropriately sized to support the temporarily much smaller business during this period."

Due to the disruption of business, Lovisa has also opted to defer 15 cents per share dividend for a period of six months.

The company is estimated to have 1,360 employees worldwide.

LOV shares were up 9.64 per cent at $4.21 at 10:35am AEDT, however they are still substantially below their $11.17 price level on 24 February.

Updated at 10:38am AEDT on 26 March 2020.

Guidance withdrawn at AMP, Dexus Property Group

Financial services giant AMP (ASX: AMP) and commercial and industrial property owner Dexus Property Group (ASX: DXS) are the latest ASX100 companies to withdraw their guidance due to uncertainty surrounding Covid-19.

In a release today, AMP explained its capital position and liquidity remained strong while its three-year transformational strategy including its client remediation program was still underway.

"In response to uncertainty in Australia and globally, we have taken decisive action to support our clients and people, while working to maintain the strength and resilience of our business," says AMP chief executive Francesco De Ferrari.

"Whilst the situation is rapidly evolving, our immediate priorities are to support the public health efforts, help our clients make the right choices, and ensure our people are safe and working in healthy environments.

"Protocols and contingency plans are also in place to ensure our operations and client services can continue throughout the pandemic."

Dexus Property Group (ASX: DXS) noted operations had performed in a way that was consistent with expectations, but uncertainty led directors to withdraw guidance for FY20.

"As custodians of many buildings across Australia's major cities, it is incumbent on us to protect our tenant base, particularly the SMEs and retailers who support our office towers and shopping precincts and are bearing the brunt of this evolving global situation," said Dexus CEO Darren Steinberg.

"SMEs are the lifeblood of the country and we need to ensure we look after them, so that when we inevitably emerge from this event, they can return to normal operations as soon as possible.

"As a priority we remain focused on the health, safety and wellbeing of our employees and the people in our buildings. We have adopted internal business continuity measures to minimise the disruption to our business and have implemented government guidelines to reduce the spread of Covid-19 at our properties."

Cloud solutions company Rhipe (ASX: RHP) also withdrew its guidance today for similar reasons. Other major companies that put their guidance on hold yesterday include Reliance Worldwide Corporation (ASX: RWC), Shopping Centres Australasia Property Group (ASX: SCP), Steadfast Group (ASX: SDF), Ingenia Communities Group (ASX: INA) and Fletcher Building (ASX: FBU).

Click here for a full list of companies that have suspended or withdrawn their guidance for FY20.

Updated at 2:24pm AEDT on 26 March 2020.

SA Premier announces $650 million stimulus package

Premier of South Australia Steven Marshall (pictured) has teased a $650 million package to help local businesses survive the Covid-19 financial crisis.

While details are yet to be released, Marshall says the Jobs Rescue Package will be discussed with a newly-established Industry Response and Recovery Council.

"This is, without question, the greatest economic emergency of our generation and our collective response must be equally as potent," says Premier Marshall.

"We recognise the enormous economic challenges confronting our key industries, their employers and staff as a result of the coronavirus pandemic and the necessary restrictions imposed to limit its spread.

"Now, more than ever, we must work together utilising our shared expertise and experience to ensure we protect as many industries, businesses and local jobs as possible."

The $650 million stimulus package complements a $350 million package announced earlier this month by the SA Government that focused on infrastructure maintenance jobs like preparing hospitals and upgrading roads and tourism infrastructure.

The 14 member Industry Response and Recovery Council represents many of the state's key industries from business, property, retail, construction and housing to tourism, primary industries, food, wine and hospitality.

Members of the Premier's Industry Response and Recovery Council (in addition to the Premier):

• Martin Haese Business SA
• Ian Markos Master Builders Association
• Daniel Gannon Property Council of Australia (SA)
• Ian Horne Australian Hotels Association
• Shaun De Bruyn Tourism Industry Council SA
• Stephen Knight Housing Industry Association
• Phil Sutherland Civil Contractors Federation SA
• Colin Shearing SA Independent Retailers' Association
• Paul Unerkov Motor Trade Association South Australia
• Brian Smedley Wine Industry Association
• Catherine Sayers Food SA
• Wes Lambert Restaurant & Catering Australia
• Rob Kerin Primary Producers SA

Updated at 9:40AM AEDT on 26 March 2020.