Melbourne Lockdown and Impact on Businesses: Baby Bunting, JB Hi-Fi, Wesfarmers

Summary

• On 2nd August, the Victorian government imposed new restrictions in Melbourne, which entered the stage 4 restrictions.
• Baby Bunting's products and services come under essential categories, consequently, its stores will remain open, with COVID safe guidelines to be followed strictly.
• JB Hi-Fi to temporarily close all the stores in metropolitan Melbourne from 5th August to at least a minimum period of six weeks.
• Wesfarmers’ retail businesses will continue operations through online services, with Officeworks and Bunnings stores to remain closed for in-store retail customers.

On 2nd August 2020, the Victorian Government announced stage 4 restrictions for metropolitan Melbourne. As per the new government's instructions, there will be night curfew from 8 pm to 5 am every night. Other than these hours, only one person per household can go out to buy food and essential items that too from the nearest goods and services providers from their place. Work and education must be done remotely.

The Australian government is taking all precautions to curb the spread of the relentless virus, as people's health is the top priority right now, and yes, the economy is expected to experience severe impacts because of the pandemic-led restrictions.

Let's now discuss how ASX-listed companies, Baby Bunting, JB Hi-Fi and Wesfarmers are affected by the new restrictions.

Baby Bunting's Stores to Remain Open in Melbourne

Australia's biggest baby goods retailer, Baby Bunting Group Limited (ASX: BBN) on 4th August provided an update related to Melbourne's new restrictions. Amid the new government guidelines, Baby Bunting's stores in Melbourne will remain open with COVID-19 safe practices to be in place. The company has a total of 12 stores in metropolitan Melbourne and three in regional Victoria.

For some time, only limited customers will be allowed inside the stores, and that too within specific parts of the stores. All the guidelines of social distancing, hygiene and cleaning are being followed strictly at the stores. However, some trivial changes will be implemented for warehouses and distribution centres, as per the stage 4 requirements.

BBN encourages customers to shop online and get benefitted through the company's contactless click and collect service. They can also use the company's Helping Hand telephone service. Meanwhile, the distribution centre and online operations based at Dandenong South in Melbourne will keep operating.

CEO and Managing Director Matt Spencer stated that BBN understands and supports the new restrictions to limit the people's movement for curbing the spread of coronavirus. More than 9,000 new babies are due in Victoria state during the lockdown period. To meet the demands of these expectant parents, Baby Bunting's Melbourne stores will remain open to offer the essential services, as well as products.

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Safety of staff, customers, and the community remains the top priority for BBN, which will make adjustments in line with the new guidelines while providing essential services to new parents. Meanwhile, the contactless car seat and capsule installation service will continue to operate, in order to support parents with the safe installation in their vehicles.

On 5th August 2020, BBN traded flat at AUD 3.620, with a market cap of AUD 461.78 million.

JB Hi-Fi to Temporarily Shut Stores in Melbourne

JB Hi-Fi Limited (ASX: JBH) has two retail brands under its umbrella - JB HI-FI and The Good Guys. The company sells consumer electronics, appliances, white goods, and home entertainment products.

In the wake of the new restrictions in Melbourne, 46 JB HI-FI stores and 21 The Good Guys stores in metropolitan Melbourne will be temporarily closed from 11:59 PM on 5th August to at least a period of six weeks.

Following the Victorian Government's guidelines, online and commercial operations of the company will continue to fulfil customers' requirements. Home delivery and contactless click and collect services will help customers during the stage 4 restrictions.

The Group maintained that the safety of team members, customers, business partners, and the community at large is the top priority during this challenging time. The warehouses and store network will operate to meet online and commercial orders, however, they will operate in line with all guidelines to ensure that the safety measures are followed.

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On 5th August 2020, JBH settled at AUD 44.790, moving up by 1.611 per cent. The company has a market cap of AUD 5.06 billion.

Wesfarmers' Online Operations to Continue, Brick & Mortar Stores to Remain Closed

Australia-based Wesfarmers Limited (ASX:WES) operates in diverse business areas such as apparel and general merchandise, office supplies, and home improvement and outdoor living. The company also has an industrial division that deals in energy, fertilisers, chemicals, and industrial and safety products.

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New measures announced by the Victorian Government are expected to have the following impacts on WES’ retail operations in metropolitan Melbourne.

• All retail businesses will continue online operations and will provide home delivery and contactless click and collect services.
• Bunnings stores in Melbourne will remain open for trade customers but closed for in-store customers.
• Kmart and Target stores will not operate during the stage 4 restrictions.
• Officeworks stores can continue serving business customers but remain closed for retail customers.

The industrial businesses in Victoria are likely to operate as per the COVID safe guidelines, and these include - Australian Vinyls, Modwood, Workwear Group, Coregas, and Blackwoods.

On 5th August 2020, WES closed the day’s trading at AUD 46.330, up by 0.086 per cent, with a market cap of AUD 52.49 billion.

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