Why the JB Hi-Fi share price is dropping lower today

The JB Hi-Fi Limited (ASX:JBH) share price is dropping lower today after being forced to close its Melbourne stores for six weeks…

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The S&P/ASX 200 Index (ASX: XJO) may be storming higher on Tuesday, but the same cannot be said for the JB Hi-Fi Limited (ASX: JBH) share price.

At the time of writing the retailer's shares are down 1% to $44.20.

This compares unfavourably to a stunning 2.1% gain by the benchmark ASX 200 index in morning trade.

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Why is the JB Hi-Fi share price dropping lower today?

Investors have been selling the retailer's shares this morning after it provided an update on the impact of COVID-19 restrictions on its businesses in Victoria.

According to the release, following the Victorian Government's announcement of stage 4 restrictions in metropolitan Melbourne, a total of 46 JB HI-FI stores and 21 The Good Guys stores will be temporarily closed to customers from midnight tonight for a minimum period of six weeks.

However, based on current state government directions, the company's online and commercial operations will continue to trade and be available to meet the needs of customers with fulfilment by home delivery and contactless click and collect.

The company's warehouses and metropolitan Melbourne store network will be operational, with strict safety measures in place, to fulfil online and commercial orders.

Which other retailers have provided updates?

Two other retailers that have released similar updates today are Baby Bunting Group Ltd (ASX: BBN) and Wesfarmers Ltd (ASX: WES).

In respect to Baby Bunting, its stores in metropolitan Melbourne will remain open during the lockdown period. COVID safe work practices will continue to be applied, including encouraging customers to shop online or use its contactless click and collect service.

Baby Bunting's distribution centre and online operations, based at Dandenong South in Melbourne, will continue to operate. Though, some minor adjustments will be made to ensure that these operations are in line with the stage 4 requirements for warehouses and distribution centres.

For Wesfarmers, both its Bunnings and Officeworks businesses will remain open to commercial and business customers. Regular consumers will be restricted to online and click and collect options.

Whereas its Kmart and Target stores in the Melbourne metropolitan region will be unable to service customers in-store.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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