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Down to Business: Carside To Go helps Applebee’s survive

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The thing I love about covering public companies is the easy access to financials and other information that privately held firms like to keep, well, private.

Public companies, though, don’t have that luxury, and sometimes that gives you a chance to better understand and appreciate their operations.

Take restaurants, for instance, in the age of COVID-19.

When concern over the novel coronavirus began to build in March, eateries faced the prospect of government-ordered reductions in dining room capacity to slow the rate of infection until all were finally told to close – save for takeout and delivery.

For U.S. restaurants, the mandate cost $80 billion in sales from March to April, according to the National Restaurant Association, with 8 million workers furloughed or laid off. For New York, the loss was $5.5 billion in sales and 527,000 workers.

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At the publicly traded chain restaurants, the damage showed up in the quarterly numbers they had to report just as the pandemic descended.

Applebee’s, the casual-dining eatery, saw 10 consecutive weeks of positive first-quarter “comp sales” wiped out. By the last week of March, the numbers – a measure of retail health based on sales at locations open at least a year – were down 80.6 percent.

Other chains saw it, too: Denny’s comp sales were off 79 percent; Olive Garden’s dropped nearly 65 percent; LongHorn Steakhouse’s fell 75 percent.

The carnage would have been even worse had they all not been able to continue selling through takeout and delivery.

At Applebee’s, which already had takeout through Carside To Go, so-called off-premises sales tripled between the beginning of the year and the end of April, running then at $17,700 per restaurant per week.

That wasn’t close to meeting the average restaurant’s annual sales of $2.4 million, though. On the first-quarter conference call of parent company Dine Brands Global in late April, Applebee’s President John Cywinski said the company-owned and franchised restaurants generally were doing only 35 percent of last year’s volume.

But comp sales were improving weekly, even with takeout’s limited menu, he said, and he predicted the off-premises business “will remain robust” as Applebee’s dining rooms begin to reopen. (Some states allowed in-restaurant dining to resume in late April; in New York, it’s slated to occur in Phase 3 of the state’s gradual reopening, which should reach the Capital Region later this month.)

On the quarterly conference call, Dine Brands CEO Steve Joyce suggested a new inverse relationship between dining in and taking out: Sales from the former now will be an incremental add-on to the latter that will slowly help restaurant profitability.

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And how will the reopened restaurants look? Expect gloves and masks, no table condiments, frequent sanitizing and social distancing, he said.

“What we don’t know … is how many people are interested in coming into restaurants at this point, and what’s that number [going to] look like,” Joyce said.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].



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electroCore Provides Business Update and Select Financial Guidance Nasdaq:ECOR

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BASKING RIDGE, N.J., July 14, 2020 (GLOBE NEWSWIRE) — electroCore, Inc. (Nasdaq: ECOR), a commercial-stage bioelectronic medicine company, today provided an operating and business update as well as select unaudited financial guidance for the second quarter and full year 2020.

“During the second quarter, the COVID-19 pandemic continued to impair business operations around the world, and as a result like many companies, we both anticipated and experienced some impact to our performance,” stated Dan Goldberger, Chief Executive Officer of electroCore. “While our overall revenues were up sequentially and achieved our guidance of being in excess of $700,000 in the quarter, paid months of therapy shipped to both the VA/DoD and outside the U.S. (OUS) channels were down modestly on a sequential basis as providers pivoted to help fight the pandemic, patient and provider appointments were cancelled, and travel and other restrictions were implemented. However, temporary softness in these channels was in part offset by replenishment orders from our specialty pharmacy partner. Additionally, the pandemic has presented us with an opportunity to explore the potential utility of non-invasive nerve stimulation technology in treating respiratory symptoms related to COVID-19. Taken together, we believe we are well positioned for a strong second half of the year as key revenue channels return to positive growth if a more normalized business environment emerges.”

COVID-19: The company recently announced that it has been granted an Emergency Use Authorization (EUA) by the FDA to facilitate the study and clinical use of gammaCore™ CV for the acute treatment of asthma exacerbations in known or suspected COVID-19 patients. The EUA is supported by data from early clinical and non-clinical work in several pilot studies that involved patients with a variety of respiratory disorders.

Additionally, two investigator-initiated clinical trials (IITs) of gammaCore™ in COVID-19 patients continue to enroll subjects – one at Hospital Clínico Universitario de Valencia in Valencia, Spain (SAVIOR 1) and the other at Allegheny Medical Center in Pittsburgh (SAVIOR 2). These trials are designed to study the potential for gammaCore™ (nVNS) to treat the respiratory symptoms and underlying inflammation affecting COVID-19 patients. Both trials continue to enroll patients and are largely funded by third party grants. Data will be reported as they become available. Additional U.S. investigator-initiated COVID-19 trials are under consideration.

Federal Supply Schedule: During the second quarter of 2020, 67 Department of Veterans Affairs (VA) and Department of Defense (DoD) military treatment facilities purchased gammaCore™ products as compared to 64 during the first quarter of 2020, 54 during the fourth quarter of 2019, 48 during the third quarter of 2019 and 35 during the second quarter of 2019. Also, during the second quarter of 2020, the company shipped approximately 988 paid months of therapy pursuant to VA and DoD originating prescriptions, compared to 1,084 paid months of therapy during the first quarter of 2020, 829 during the fourth quarter of 2019, 553 during the third quarter of 2019 and 233 during the second quarter of 2019.

As the company indicated in its earnings announcement in May 2020, in light of the ongoing pandemic, the company’s ability to visit hospitals and doctors has been limited, and according to VA officials, some 5.7 million appointments with VA providers were cancelled between February and April. Partly offsetting this is the VA’s advanced telehealth capabilities, which have increased almost tenfold from 2,500 daily sessions in early March to nearly 25,000 current daily sessions , according to the Federal News Network. gammaCore™ can be prescribed easily during a telehealth consult and delivered directly to the patient’s home, and this has allowed us to navigate through the crisis with only a modest sequential reduction in paid months of therapy. In light of these recent challenges, the trajectory of this business channel remains difficult to forecast into the remainder of the year. We believe, however, that our performance during the second quarter represents a strong leading indicator and gives us conviction that this important channel will rebound strongly when and if the pandemic subsides.

Outside of the U.S.: During the second quarter of 2020, electroCore shipped approximately 938 paid months of therapy outside of the United States, as compared to 1,008 during the first quarter of 2020, 961 during the fourth quarter of 2019 and 828 during the third quarter of 2019. The modest sequential decline was driven by COVID-19 related disruptions and discontinued operations in Germany.

Commercial: The inventory placed in the commercial channel during 2019 has been fully dispensed by our specialty pharmacy partner. As a result, the company shipped a small replenishment order in June. The company expects further contribution from replenishment orders in coming quarters.

Clinical: As previously disclosed, electroCore recently made the decision to terminate the PREMIUM 2 clinical trial. There are currently no company-funded trials ongoing, but as previously indicated, multiple IITs are active and more are under consideration. In addition to COVID-19/reactive airway disease, gammaCore™ IITs are progressing in stroke, subarachnoid hemorrhage and Sjogren’s syndrome.

Financial Guidance:

electroCore today announced the following preliminary unaudited financial guidance for the second quarter of 2020:

Q2 2020 revenue: The company expects second quarter 2020 total revenue to be approximately $730,000 to $750,000, as compared to first quarter 2020 total revenue of $734,000.

Q2 2020 cash used in operations: During the second quarter, electroCore used approximately $5.5 million to fund its operations, not including $1.1 million received in connection with its sale of New Jersey net operating losses, as compared to $8.4 million in the first quarter of 2020 and $9.4 million in the fourth quarter of 2019.

June 30, 2020 cash: The company ended the first quarter of 2020 with approximately $18.9 million of cash, cash equivalents and marketable securities.

About electroCore, Inc.

electroCore, Inc. is a commercial-stage bioelectronic medicine company dedicated to improving patient outcomes through its platform non-invasive vagus nerve stimulation therapy initially focused on the treatment of multiple conditions in neurology. The company’s current indications are for the preventative treatment of cluster headache and acute treatment of migraine and episodic cluster headache.

For more information, visit www.electrocore.com.

About gammaCore

gammaCore™ (nVNS) is the first non-invasive, hand-held medical therapy applied at the neck to treat migraine and cluster headache through the utilization of a mild electrical stimulation to the vagus nerve that passes through the skin. Designed as a portable, easy-to-use technology, gammaCore™ can be self-administered by patients, as needed, without the potential side effects associated with commonly prescribed drugs. When placed on a patient’s neck over the vagus nerve, gammaCore™ stimulates the nerve’s afferent fibers, which may lead to a reduction of pain in patients. 

gammaCore™ is FDA cleared in the United States for adjunctive use for the preventive treatment of cluster headache in adult patients, the acute treatment of pain associated with episodic cluster headache in adult patients, the acute treatment of pain associated with migraine headache in adult patients and the prevention of migraine in adult patients. gammaCore™ is CE-marked in the European Union for the acute and/or prophylactic treatment of primary headache (Migraine, Cluster Headache, Trigeminal Autonomic Cephalalgias and Hemicrania Continua), Bronchoconstriction and Medication Overuse Headache in adults.

  • Safety and efficacy of gammaCore™ have not been evaluated in the following patients:
    º  Patients diagnosed with narrowing of the arteries (carotid atherosclerosis)
    º  Patients who have had surgery to cut the vagus nerve in the neck (cervical vagotomy)
    º  Pediatric patients
    º  Pregnant women
    º  Patients with clinically significant hypertension, hypotension, bradycardia, or tachycardia
  • Patients should not use gammaCore™ if they:
    º  Have an active implantable medical device, such as a pacemaker, hearing aid implant, or any implanted electronic device
    º  Have a metallic device such as a stent, bone plate, or bone screw implanted at or near their neck; or
    º  Are using another device at the same time (e.g., TENS Unit, muscle stimulator) or any portable electronic device (e.g., mobile phone).

In the U.S., the FDA has not cleared gammaCore™ for the treatment of pneumonia and/or respiratory disorders such as acute respiratory stress disorder associated with COVID-19.

Please refer to the gammaCore™ Instructions for Use for all of the important warnings and precautions before using or prescribing this product available at www.gammacore.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements about electroCore’s expectations for revenue and cash used in operations during the second quarter of 2020, its expectations for full year 2020 and its expectations for future performance, as well as electroCore’s business prospects and clinical and product development plans, its pipeline or potential markets for its technologies, the timing, outcome and impact of regulatory, clinical and commercial developments including potential human trials for the study of nVNS in COVID-19 patients in Spain, the U.S., or elsewhere, the business, operating or financial impact of such studies, and other statements that are not historical in nature, particularly those that utilize terminology such as “anticipates,” “will,” “expects,” “believes,” “intends,” other words of similar meaning, derivations of such words and the use of future dates. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the ability to raise the additional funding needed to continue to pursue electroCore’s business and product development plans, the inherent uncertainties associated with developing new products or technologies, the ability to commercialize gammaCore™, competition in the industry in which electroCore operates and overall market conditions. Any forward-looking statements are made as of the date of this press release, and electroCore assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents electroCore files with the SEC available at www.sec.gov.

Investors:

Hans Vitzthum
LifeSci Advisors
617-430-7578
hans@lifesciadvisors.com

or

Media Contact:

Jackie Dorsky
electroCore, Inc.
973-290-0097
jackie.dorsky@electrocore.com

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Stocks Fall as Earnings Season Begins: Live Updates

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Credit…Ruth Fremson/The New York Times

Boeing customers canceled orders for 60 737 Max jets last month, the latest blow for a plane that has been grounded since March 2019 following a pair of fatal crashes. Most of the cancellations were from companies that buy planes and lease them to airlines. Boeing also received one new order, from FedEx, for a 767 freighter.

“We continue to closely monitor the commercial marketplace by staying very engaged with our customers around the globe to fully understand short term and long term requirements,” Greg Smith, Boeing’s chief financial officer, said in a statement.

Boeing has lost 323 orders for various planes this year, after accounting for new orders and cancellations. The company removed another 461 orders from its backlog, under stricter accounting methods adopted in 2018 that consider a customer’s financial health and their ability to negotiate or walk away from contracts.

Including that adjustment, Boeing’s order backlog stood at 4,552 at the end of June, down from 5,406 at the start of the year.

Credit…Zack Wittman for The New York Times

Wells Fargo on Tuesday reported its first quarterly loss since 2008, losing $2.4 billion as the pandemic’s economic shocks ravaged nearly every line of its business.

In a sign of more trouble ahead, the bank added $8.4 billion to its reserve for loan losses, more than twice what it set aside last quarter. It said it would, for the first time since the Great Recession, cut its dividend this quarter, dropping its payments to investors to 10 cents a share, down from the 51 cents it has paid for the last few quarters.

Charles W. Scharf, the bank’s chief executive, said he was “extremely disappointed” with the bank’s performance.

“While the negative impact of the pandemic is unprecedented and many of our business drivers were negatively impacted, our franchise should perform better,” he said in a statement. “We will make changes to improve our performance regardless of the operating environment.”

The bank’s revenue for its second quarter, which ended June 30, dropped to $17.8 billion, down nearly 18 percent from a year ago. Last year, it earned $6.2 billion during the quarter.

Wells Fargo is bracing for coming losses on its commercial loans, especially in real estate, where it set aside $6.4 billion. Consumer loans, especially mortgages, are also flashing warning lights; the bank added $2 billion to cover anticipated losses there.

Credit…Elijah Nouvelage/Reuters

Revenue at Delta Air Lines declined by 88 percent in the second quarter compared to a year earlier, reflecting what its chief executive described as the “truly staggering” toll the coronavirus pandemic has had on the aviation industry. That decline contributed to a $5.7 billion quarterly loss, compared to last year’s $1.4 billion profit.

“Given the combined effects of the pandemic and associated financial impact on the global economy, we continue to believe that it will be more than two years before we see a sustainable recovery,” Ed Bastian, Delta’s chief executive officer, said in a statement.

Delta said it ended the quarter with $15.7 billion in cash on hand and cut its daily cash losses to $27 million per day, down from $100 million per day during the depths of the crisis. The company hopes to stop that daily bleeding by year’s end.

The company’s quarterly losses were driven by a 93 percent decline in passengers, though they included a more than $2 billion write-down associated with investments in a trio of troubled foreign carriers: Latam Airlines Group, Grupo Aeroméxico and Virgin Atlantic.

More than 45,000 employees have taken temporary voluntary unpaid leave. Last week, United Airlines said it could furlough as many as 36,000 workers when federal stimulus funding for payroll runs out at the end of September. Delta has not yet detailed what impact the expiration of funds may have, though it did warn nearly 2,600 pilots last week that they could be furloughed.

Credit…Oli Scarff/Agence France-Presse — Getty Images

Richard Branson has reached a 1.2 billion pound ($1.5 billion) deal with two credit-card payment processing companies and an American hedge fund to rescue Virgin Atlantic from financial collapse after the British government rejected the airline’s request for a loan.

Davidson Kempner Capital Management will put in £170 million, and Mr. Branson’s Virgin Group will contribute £200 million using money raised from the sale of shares in Virgin Galactic, his space travel company.

The deal came together after support from two payment processing companies, First Data and Cardnet. First Data had insisted on high levels of cash collateral, holding up the arrangement, Sky News reported. Delta Air Lines, which owns 49 percent of Virgin Atlantic, also agreed to defer marketing charges and other payments alongside majority owner Virgin Group, opening up about £400 million to Mr. Branson’s airline.

The pandemic had led the airline to ground most of its fleet and lay off more than 3,000 workers. The British government has resisted pressure to support individual companies, and told airlines that aid wouldn’t be considered until the firms had exhausted all other options.

Mr. Branson had said he was willing to use his island in the Caribbean as collateral to raise funds, but he was unable to secure a government-backed deal for his Australian airline, and in April, Virgin Australia went into administration.

Virgin Atlantic’s passenger flights will resume next week.

The airline industry has been battered by the pandemic, but Mr. Branson’s firm is in a particularly weak position because most of its flights are trans-Atlantic. Long-haul international travel is not expected to recover soon.

Credit…Amr Alfiky for The New York Times

JPMorgan Chase on Tuesday revealed that it had earned $4.7 billion during the months of April, May and June, just under half of what it earned during the same period a year ago, as it diverted billions of dollars to a reserve fund in order to prepare for a potential economic shock.

Despite the drop in earnings, another number suggested a boom time. While businesses and many regular services in vast swaths of the United States were closed to try to stem the coronavirus pandemic, JPMorgan brought in the largest quarterly revenue haul in its history: nearly $34 billion, compared to just over $29 billion in the second quarter of 2019. The increase was driven by a surge in its Wall Street businesses, including trading in stocks, bonds and other financial market instruments, where a record haul of $16 billion in JPMorgan’s Corporate & Investment Bank division represented a 66 percent increase from last year.

The bank added nearly $11 billion to the pool of money it keeps ready to cover any losses, $9 billion more than last year. Of that, almost $6 billion was designated to handle losses on loans to consumers, including credit cards.

Credit…John Taggart for The New York Times

Citigroup said Tuesday that its quarterly profit fell 73 percent as it set aside $5.6 billion to cover future loan losses triggered by the widespread unemployment caused by the pandemic.

The bank also reported net credit losses of $2.2 billion, a 12 percent increase from last year, resulting from individuals and businesses that have already defaulted on loans during the crisis, bringing the Citi’s total credit cost in the second quarter to $7.9 billion.

As the third largest credit issuer in the United States, Citigroup is particularly vulnerable to increases in credit card delinquencies, which tend to dovetail with a rise in unemployment. The bank said it had offered forbearance on two million credit card accounts representing 6 percent of balances so far.

Net income fell to $1.3 billion in the second quarter of 2020 from $4.8 billion a year earlier. Revenue rose 5 percent to $19.77 billion as the pace of trading activity rose.

“While credit costs weighed down our net income, our overall business performance was strong during the quarter, and we have been able to navigate the COVID-19 pandemic reasonably well,” Michael L. Corbat, Citigroup’s chief executive, said in a statement.

Banks have shouldered the burden of processing applications and distributing funds for the federal government’s massive aid effort, the Paycheck Protection Program, which gave small businesses potentially forgivable loans to help them stay afloat during the virus crisis. Citibank saw an 18 percent surge in deposits during the second quarter to $1.23 trillion as a result of cash infusions associated with federal aid programs.

Credit…Ad Council

In March, the Advertising Council, a nonprofit organization that creates public service announcements about social issues, was days away from introducing a campaign with the White House about work force training when the economy locked down. The ads finally debuted on Tuesday, retooled to address the pandemic’s devastating effect on jobs.

With more than 18 million workers receiving jobless benefits in late June, the effort focuses on education and certification resources that can be found online. The campaign, created with partners like Apple and IBM, was originally called “Choose Something New,” meant as an inspirational message to people looking to change career paths. It became “Find Something New,” focusing on those struggling to find work during a national emergency.

“The tone of the campaign really needed to shift to be more urgent and actionable,” said Michelle Hillman, the chief campaign development officer at Ad Council. “We needed to really understand the landscape of what was happening.”

More companies are cautiously venturing back into marketing as states try to reopen. After several months focusing on health-related messaging, Ad Council recently revisited the work force campaign, which now includes rewritten copy and workers filmed at a distance using iPhones.

The campaign will run in space donated by television networks like Fox and NBC, digital platforms like Facebook and Snap and in print publications and on billboards. Viewers will be directed to resources at FindSomethingNew.org.

Credit…Alberto Pezzali/Associated Press

May was supposed to be the first month of Britain’s economic recovery, when some restrictions on business activity were eased after the near-total lockdown of April. Some economists predicted the economy would grow by 5.5 percent after contracting by nearly 7 percent in March and a further 20 percent in April. But the data announced Tuesday was greeted as a disappointment, showing just a 1.8 percent increase from the month before.

The British government allowed some manufacturing and construction activity to resume in mid-May, and output in both sectors rose by more than 8 percent. However, the larger services sector remained lackluster, growing by less than 1 percent from April, as about 16 percent of businesses reported having no revenue in the month.

The outlook for the rest of this year remains bleak. The independent Office for Budget Responsibility laid out three scenarios for the trajectory of the British economy, all of which foresee an unprecedented increase in public borrowing to try to offset the economic shock of the pandemic.

“The U.K. is on track to record the largest decline in annual G.D.P. for 300 years, with output falling by more than 10 percent in 2020 in all three scenarios,” the OBR said in a report published Tuesday.

In its central scenario, the office said economic output would return to its pre-pandemic peak by the end of 2022, and the unemployment rate would rise to 10.1 percent next year.

Credit…Jenna Schoenefeld for The New York Times

Stocks fell on Tuesday amid a re-tightening of restrictions on businesses and fresh data showing slower-than-expected economic activity.

The S&P 500 fell about half a percent in early trading. European markets were broadly lower, most by more than 1 percent and stocks in Asia also fell.

On Wall Street, the decline added to a sell-off that began late on Monday as concern about the continued spread of the coronavirus overwhelmed an early rally. The S&P 500 dropped more than 2 percent from its highest point on Monday, to end the day with a nearly 1 percent decline.

Stock trading has become more turbulent lately amid rising concerns that large states would have to pull back on their reopening plans. In California, the governor announced a sweeping rollback on Monday, ordering the closure of indoor operations statewide for restaurants, wineries, movie theaters and zoos. Bars would also be forced to close all operations. Similar actions were predicted in Texas.

Adding to the uncertainty is earnings season, which offers investors their first chance to hear from businesses about how the pandemic has hurt profits. On Tuesday, JPMorgan reported that its earnings had halved in the second quarter, while Wells Fargo had its first quarterly loss since 2008, and Delta Air Lines said revenue plunged by 88 percent.

In Britain, there were hopes that the government’s economic data for May, when some restrictions on businesses eased following April’s near-total lockdown, would show a strong upswing from the month before. But the data released Tuesday reported that the economy grew by only 1.8 percent in May, far less than the 5.5 percent widely predicted. The government’s independent budget review office said Britain was on track for “the largest decline in annual G.D.P. for 300 years.”

Credit…Andrea Chronopoulos

Consumers in Europe are going on a shopping spree as their economies reopen, offering hope that a fragile recovery from a deep pandemic-induced recession may be taking hold.

Retail sales in the eurozone, which plunged to record lows while millions were confined, surged 17.8 percent in May compared with the month before, as people fanned out to buy furniture, electronics, clothing and computer equipment, Europe’s statistics agency reported this week. The biggest gains are in France and Germany, where spending has rebounded to near pre-confinement levels.

The current binge has doused some worries that Europeans might feel too shaken to spend again, as happened in China, where many chose to curtail expenditures after losing their jobs or having their pay slashed.

“Consumers are driving the rebound across much of Europe more than expected,” said Holger Schmieding, chief economist of Berenberg Bank. “There is a relief that lockdowns are over.”

But whether people will keep opening their wallets remains to be seen. Spending is still around 7 percent lower than where it was before the pandemic hit.

For now, at least, patrons have not stopped flocking to socially distanced sidewalk tables at cafes and bistros in France. Dutch flower and plant suppliers are reporting record demand as shoppers crowd do-it-yourself stores around Europe to beautify their homes. In Germany, families are heading to malls to buy new appliances after the government lowered the value-added tax to stimulate sales.

Credit…Horatio Baltz for The New York Times

It was harrowing enough for small businesses — the bars, dental care practices, small law firms, day care centers and other storefronts that dot the streets of every American town and city — to have to shut down after state officials imposed lockdowns in March to contain the pandemic.

But the resurgence of the virus, especially in states such as California, Florida and Texas that had begun to reopen, has introduced a far darker reality for many small businesses: Their temporary closures might become permanent.

Nearly 66,000 businesses have folded since March 1, according to data from Yelp, which provides a platform for local businesses to advertise their services and has been tracking announcements of closings posted on its site. Small businesses account for 44 percent of all U.S. economic activity, according to the Small Business Administration, and closures on such an immense scale could devastate the country’s economic growth.

On the last Friday of June, after Gov. Greg Abbott of Texas said that bars across the state would have to shut down a second time because coronavirus cases were skyrocketing, Mick Larkin decided he had enough. He and his partner decided to close their club, Krank It Karaoke in Wichita Falls, Texas, for good.

“We did everything we were supposed to do,” Mr. Larkin said. “When he shut us down again, and after I put out all that money to meet their rules, I just said, ‘I can’t keep doing this.’”

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Plan for business travel ‘step in right direction’

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Exact details are still to be confirmed, but it is proposed that people who have to conduct business in person in the Bailiwick will be able to travel to Guernsey and leave the same day, while adhering to strict rules.

Guernsey International Business Association chairman Tony Mancini said it was only last year that new economic substance requirements came in, which aimed to make it clearer where business was being carried out.

He said while the rules themselves had not made a big difference to how Guernsey did business, lockdown had caused a big impact.

When businesses are first established or wound down, then the majority of a board needs to meet in person. Lockdown rules have made this very hard, especially when board members might not live in Guernsey.

Mr Mancini said while there was some leniency during this period, especially while other parts of the world were also in lockdown, the association did need to look forward as to how to do business now and going forward.

‘There is not a pressing demand for this at the moment,’ he said.

‘Jersey has opened its borders and no one is rushing there for business. But we think over the next few months there will be more.’

He said Guernsey’s response to the virus had been very good and it had given people a positive image of the island. ‘Now we need to show we can accommodate business in a healthy and safe way,’ he said.

‘The general consensus is that there is not a huge demand, but this will look good and get the message out there that we are open for business.’

Guernsey Institute of Directors chairman John Clacy said it was important to balance the island’s economy and the health of islanders.

‘Whilst we await further details of how the business tunnels will operate, the ability for business travellers to come to the island for meetings – where their presence is required for legal, regulatory and practical reasons – is good news for many companies,’ he said.

‘The arrangement should enable directors to deal with any existing business which needs to be transacted on the island, and in situations where the new transaction must take place in Guernsey, for example, when establishing trusts.

‘However, the concept appears to be a one-way arrangement, and the need for local directors to travel to the UK for similar reasons has not yet been addressed.’

He added that proposals also did not allow for trips for business development or other business meetings.

‘Whilst the need for these is currently limited by many UK and European businesses working from home, as this changes, the need for business development travel will become more pressing,’ he said.

‘The global nature of Guernsey’s businesses often requires people to travel to the UK – and elsewhere – to market, network and generally build pipelines of new business.

‘If Guernsey’s professionals cannot leave the island without the quarantine on return for meetings, presentations or pitches, we will be at a disadvantage when competing against other jurisdictions whose borders are open.’

He said the business tunnels were a step in the right direction, but more details were needed about the future and phase six of the easing of lockdown restrictions when the island would rejoin the global community.

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