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38 Brands on the Brink of Declaring Bankruptcy

Dollar Tree and Family Dollar

Dollar stores have been statistically recession-proof in the past, but that doesn’t mean they’re immune. Dollar Tree acquired Family Dollar in 2014, but both brands are now on the brink. Recently, Dollar Tree has considered rising prices to combat inflation, so we’ll see if it pulls itself out of this hole.

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Party City

Party City has had a hard time staying afloat after net losses. Recently, the retailer made a choice to swap helium sources and close 45 stores to combat the decline in sales. While Party City is healthier than other retailers, but that doesn’t mean the store is completely in the clear.

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The GAP has been seriously struggling, so much so that they’re splitting up their business. Early 2019, it was announced that Old Navy would become a separate firm as GAP closes 230 stores. This move is probably due to the fact that Old Navy is GAP’s strongest brand, and it’s trying to stay afloat amid retail trouble.  

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You’d think Overstock wouldn’t have a hard time given that they’re an online retailer, but it’s no-go. Overstock has been trying to sell its e-commerce unit since December, and buyers aren’t chopping at the bits. It’s likely due to the fact the company has had dropping revenues with growing debt.

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Office Depot

Office Depot is one of the big names that’s been losing to online retailers—it’s just cheaper to buy office supplies online. The company tried to merge with Staples, but the plan was rejected by those fearful of a copy paper monopoly. Lagging sales and $1 billion in debt could spell the end for Office Depot.

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Fred’s has been closing stores steadily for a while now. Recently, it announced the sale of 185 of it’s 350 pharmacies to Walgreens. Now, Fred’s has hired a new financial advisor in the hopes it can restructure and save itself from bankruptcy.

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Claire’s is a “trendy” retailer aimed at teens. The only issue is that they’re stuck in the ’90s. The retailer filed for bankruptcy and exited in October 2018, but sales have remarkedly declined. Claire’s also closed around 1,600 stores, and many of the ones left over are in malls. Considering malls are closing at an alarming rate, it’s only a matter of time.  

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Macy’s has been struggling to avoid bankruptcy for a while now. More recently, it’s shrunk the number of stores it has, but the company can’t keep up. Macy’s stocks have been hit hard, and many financial experts don’t see a way out for the giant retailer.

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J.C. Penny

J.C. Penny is one of the three major department stores that are struggling. The CEO left in hopes of a more secure position, and it seems like that was a great decision for him. The large retailer filed for bankruptcy soon after. As an attempt to stay afloat, the bankruptcy is a restructure plan that will close 240 stores by 2022. This is 30% of their total locations, so it's a pretty big hit. They're hoping not to go under, but we'll see. 

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Kohl’s has had recent stock issues. At the start of the year, sales were beginning to drop. Then they had some good news: Shopko closing most (if not all) its stores. This means good news for the retailer, although this could just be temporary. Unless Kohl’s makes some changes to improve sales, it may be headed in the same direction as Shopko.

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Applebee’s has spent a good chunk of change renovating its restaurants and expanding its menu to attract new customers. Unfortunately, it doesn’t seem to be working. The chain has been steadily closing stores since 2016. This makes it hard for Applebee’s to find investors, so it could be on the downswing.

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People have been predicting Sears’s fall from grace for a while now, and it’s finally here. It seems like Sears is edging closer and closer to bankruptcy with every passing month. The company has been selling off brands in the hopes that it can survive a bit longer, but the reality of the situation is that it’s bleeding income.

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Toms Shoes

Toms may have comfortable footwear, but people aren't buying. The company has had a tough time trying to pay down five years of debt after scoring a $313 million investment from a private-equity firm, Bain Capital.  

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Some investors saw Quiznos as a horrible business model, and those people may have been right. The company has been struggling to compete against big names like Subway, Firehouse Subs, and Jimmy John’s. An investment company purchased Quiznos in 2018, but we’ll have to wait and see if there’s an impact.

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Victoria’s Secret

Victoria’s Secret may have had great success in the late ’90s and early 2000s, but things have recently changed. The CEO made controversial comments about transgender and plus-size models, and sales have taken a huge hit. On average, Victoria’s Secret has closed around 15 stores per year.

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IHOP isn’t fairing very well in today’s market. It attempted a huge marketing scheme by saying it was going to change its name to “International House of Burgers” or IHOb, and that just caused a stir with Applebee’s. While IHOP deals with dropping sales, it’s now also embroiled in a lawsuit with Applebee’s.

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Bed Bath & Beyond

Experts are guessing that Bed Bath & Beyond will be the next major retailer to go bankrupt. Over the last two years, the stock has dropped 61%. Revenue has been steadily shrinking, and profits are looking even worse. Bed Bath & Beyond is iconic, but not iconic enough to save itself from bankruptcy.  

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Pier 1

Despite a bit of a turn-around, COVID-19 and existing debt hit Pier 1 pretty hard. The brand has been suffering from execution issues and problems from competition like Amazon and Wayfair. In February of 2020, Pier 1 filed for bankruptcy. By May, the brand decided to shut down all of its stores. Many blame the Coronavirus, and while that had a huge hit, Pier 1 has been struggling for a while. All 540 stores will shut down. 

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Starting in Fall 2019, Walgreens decided to close 200 stores while also dramatically cutting costs by 2022. All this comes on top of removing health insurance for a number of retirees and bonuses for store managers. Walgreens is responding to a massive 24% drop year-over-year in earnings. If it can’t pull itself out of the hole, it may not survive the coming years.

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Outback Steakhouse

Outback, Carrabba’s, and Bonefish Grill are all under Bloomin’ Brands, and all of them are struggling. People are now choosing healthier restaurants, and that makes it hard for chains like these to remain afloat. The company has been announcing losses of $4.3 million, so the plan is to close stores in the hopes that profits return.  

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TGI Fridays

People aren’t going to TGI Fridays. As a result, the company has stopped growing and started closing stores. The company hoped to change its menu up a little and offer a few incentives, but it isn’t doing the trick. Shares are dropping, and it may not be much longer until it has to file for bankruptcy. In 2019, the company was acquired by Allegro Merger, but it may be too late. 

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Abercrombie & Fitch

Abercrombie & Fitch has had a hard time adapting to the new market. Millennials are less interested in shirtless guys and more interested in ethical companies. A&F has consistently received bad press, and customers avoid them. This has led to huge drops in profits and significant revenue loss.

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J. Crew

J. Crew has $1.7 billion in debt, and it’s struggling to pay it off. That’s mostly thanks to years of declining sales. On top of that, the CEO resigned in November after lasting only 17 months. J.Crew is having a hard time replacing them, possibly because everyone knows they’re about to go belly up.  

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Walmart, Amazon, and Dick’s Sporting Goods have made it tough for Academy to make a profit. It’s closed over 240 locations recently, and that doesn’t spell good news for the brand. In general, the market is pretty competitive.  

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Neiman Marcus

Luxury department stores are on their last legs. Neiman Marcus, in particular, reported positive sales and growth over the last five quarters, but that doesn’t make up for the years of losses. All that loss caused a significant amount of debt, something to the tune of $5 billion, and Neiman Marcus is having a hard time paying it off.

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David’s Bridal

David’s Bridal may have just emerged from bankruptcy, but that doesn’t mean they’re immune from another. They shrunk their debt load by $450 million, but that doesn’t make up for falling sales. Brides nowadays are opting for casual wedding dresses over traditional gowns.  

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PetSmart is the largest pet retailer in the United States, but it may not last much longer. With sites like Amazon, PetSmart is having a hard time paying down debt while also making a notable profit. Growing competition may force this retailer to file for bankruptcy. In 2019, PetSmart bought e-commerce competitor Chewy, but that just weakened the company's financial position. 

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CVS has begun closing stores all over the United States, including 50 locations in April alone. Overall, CVS reported a $421 million net loss for Q4 2018. Things didn’t get better as stocks fell dramatically earlier in the year.

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Lowe’s is embroiled in a battle against Home Depot to stay away from bankruptcy. In an attempt to compete, the company purchased Orchard Supply Hardware. Immediately afterward, they were forced to lay off 4,000 employees and close 98 stores. The problem is that this acquisition cost much more than expected, which will require Lowe’s to make some major changes to stay away from bankruptcy.  

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Subway franchisees have been complaining about the company for a while. Prices have been going up, food quality has been going down, and some stores are failing to stay afloat. Subway just can’t compete with other sandwich chains that offer better food at a better price.  

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Cheesecake Factory

Over the last couple of years, stocks for the Cheesecake Factory have begun to decline. Overall, the stock fell over 25% in the last year, and that’s a pretty steep decline. Now, it’s beginning to close stores in once profitable areas. The fact of the matter is that people just don’t want to go there anymore.  

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Forever 21

Forever 21 announced in September 2019 that would have to file for bankruptcy. Along with this, it’s closing 350 stores worldwide, and ceasing operations in 40 countries, including Canada. The brand helped create the “fast fashion” trend, but it wasn’t enough.

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Rite-Aid wanted to merge with competitor Walgreens not too long ago, and part of that was because it was competing with CVS Health, too. Well, like many other stores in the same market, it’s not doing too well. The CEO stated the pharmacy was “acting with urgency” to change its trajectory, but recent projections aren’t looking too good.

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This year, GNC has a plan to close as many as 900 stores, mostly due to the fact that the company hasn’t been profitable in a while. This is coming on top of closing 192 company-owned and franchised locations. It’s just easier to purchase your supplements and nutritional powders elsewhere – not to mention cheaper in many instances.

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Ascena Retail

Ascena Retail may not sound familiar, but the brand owns Lane Bryant, Lou & Grey, Ann Taylor, and Catherines. Lately, the company has considered selling two of its chains, Lane Bryant and Catherines, in an attempt to stave off bankruptcy. For the first three quarters of last year, Ascena retail had losses totaling about $300 million while also owing creditors about $1.35 billion. Unless it gets some serious cash flow, it could be going under. 

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Dunkin’ Donuts

Everyone loves donuts, but apparently not as much as we used to. Dunkin’ Donuts just released a statement that they had to close 450 stores, most inside gas stations and outlet stores. The statement seemed to focus on the fact that Dunkin’ isn’t suffering, but rather looking to put these stores in better places.

These stores are set to close by the end of the year. The brand hasn’t yet declared bankruptcy but closing 450 isn’t a small number. While we would understand closing some inside of outlet stores, gas stations haven’t been closed during the pandemic. That means they didn’t see a dip in sales because of COVID-19. 

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Pizza Hut

One of the biggest hits recently was the bankruptcy of one of the largest Pizza Hut franchisees. NPC International filed for Chapter 11 bankruptcy following the prolonged shutdown of COVID-19. A total of 1,200 Pizza Huts are going to shut down in 27 states.

This accounts for nearly 40,000 employees. The group has been struggling with the pandemic and shutdowns since everything began. Overall, it’s accrued a debt of nearly $1 billion. Thankfully, Pizza Hut has other franchisees, so the brand will live to see another day. 

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Wendy’s is another restaurant that’s closing a lot of stores. The same franchisee, NPC International, that owned 1,200 Pizza Huts also owned 400 Wendy’s locations. Because of this, these 400 Wendy’s locations are shutting down in the same 27 states.

Considering there are over 6,700 Wendy’s locations, the brand won’t see a huge dent in profits. Some people will just have to drive a little farther for their Baconator. The bankruptcy comes after state-wide shutdowns from the COVID-19 crisis.

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