J.C. Penny has been struggling for a while now. The company has been closing stores left and right, so it’s no surprise that it filed for Chapter 11 bankruptcy in May 2020. Much of this has to do with the coronavirus, and how it caused massively decreased profits. People just weren’t shopping like they used to.
As unemployment rose, people spent less money on things, so J.C. Penny had to make a move. Mid-May, the company declared that it would close about 29% of its stores, according to LA Times. The retailer is going from 846 stores down to 604. Considering many of those are in malls, it’s not much of a surprise.
Macy’s is another major retailer that’s been hit by hard times. Since 2008, Macy’s has either had negative quarter growth or barely positive. That’s crazy considering 2006 saw a huge boom. Then, in 2020, COVID changed the game. That was the straw that broke the camel’s back. Macy’s filed for bankruptcy.
In early March 2020, Macy’s announced that it would be closing all stores nationwide. Brick-and-mortar stores would close by the end of the month. This included Bloomingdale’s, Bluemercury, and Macy’s Backstage. Online sales still seem available for now, but we’re not sure how much longer it’ll last.
Before COVID even hit, Gap wasn’t doing great. In February 2019, Gap announced that 230 locations would close over the next two years (through 2021). That was before the pandemic. By February 2020, Gap’s stock declined by 50%, according to Forbes.
Considering the company gets approximately 80% of its business from the United States (and the US shut down for one to two months), things haven’t improved much. Unless this retailer starts to make big moves, it won’t make it to the end of the year.
Victoria’s Secret has had money issues thanks to several PR disasters. Then came the coronavirus. As you can imagine, people weren’t running out to buy lingerie and overpriced PJs. By May 2020, Victoria’s Secret had to close at least 250 stores in both the United States and Canada.
Considering it only has a little over 1,000 locations, that’s a pretty big hit. CEO Stuart Burgdoerfer further stated that he suspects more than 250 stores to close this year, 2021, and even more in 2022. This retailer may be seeing its last days.
It’s no surprise that J. Crew made this list. Before the pandemic even hit, the retailer struggled with massive debt and an identity crisis. This caused it to have poor sales, which only exacerbated its current debt load. Then, coronavirus shut down all brick-and-mortar shops, and unemployment soared.
According to Business Insider, J. Crew had nearly $1.7 billion in debt as of February 2020. Because of this, the company filed for bankruptcy in May. The Chapter 11 option gave them the ability to restructure their debt, but that doesn’t mean it’s out of the clear.
Luxury retailers have affected worse than some other retailers, Neiman Marcus, especially. The brand has been closing a few stores, but it has refused mass closings thus far. In May 2020, news broke that Neiman Marcus had to file for Chapter 11 bankruptcy. It was the first store to file amid the coronavirus pandemic.
While this didn’t spell the end of Neiman Marcus, things didn’t quite go as planned. In June 2020, several news outlets reported that Neiman Marcus breached the terms of its loan. The company transferred the retailer’s Mytheresa unit to shareholders, preventing access to creditors. Judges haven’t looked on this move positively.
The desire for fast fashion has been declining lately. Forever 21 is one of the industry’s most prominent proponents, but it’s been closing stores thanks to coronavirus. The brand temporarily closed all its stores initially, which wasn’t great news for a company that had filed for bankruptcy a few months prior.
In September 2019, Forever 21 filed for Chapter 11 bankruptcy with the desire to “exit most international locations in Asia and Europe,” according to a press release. Now, with sales decreasing from shutting down stores, Forever 21 is really struggling to stay afloat.
Our first question with this one is, “Is K-Mart even still around?” Apparently, yes. The brand is still managing to stay afloat, but COVID could be the final death toll. In the last 15 years, K-Mart has closed thousands of locations and laid off hundreds of thousands of employees. Sears purchased it, but it isn’t fairing so well, either.
Sears filed for bankruptcy and has barely managed to stay positive, too. As of February 2020, the brand was forced to close another 45 stores due to increasing debt, COVID concerns, and decreased sales. K-Mart is holding on longer than we thought it would, but maybe it’s time?
Bridal stores have had an especially hard time. Several bridal companies shut down, which gave David’s Bridal a bit of a breath of life. That doesn’t mean things are all good for the company. Due to COVID-19, people aren’t really getting married, mostly because we can’t gather or travel for fear of spreading the illness.
That means stores that cater specifically to weddings are taking on debt without getting sales, David’s Bridal included. In January 2019, the company filed for bankruptcy. It decreased its brick-and-mortar footprint while focusing on its online presence. Unfortunately, coronavirus disrupted their plans and forced more shutdowns.
Ascena Retail Group
You may not recognize “Ascena Retail Group,” but you would know the brands owned by it. Lane Bryant, Justice, Loft, and Ann Taylor are all owned by Ascena, and most of them are located in malls. People have been steering away from malls for the last few years, and that only ramped up as coronavirus became a bigger concern.
In 2019, Ascena closed 62% of its stores, and year-over-year, sales are down 83%. The CEO made a press release saying that the company will do whatever it can to reduce costs while resuming operations. That last part depends on the public, and many people are still avoiding malls (and shopping, in general).
As retail locations shut down, so did events. Concerts, gatherings, conventions, and anything involving a ticket became postponed indefinitely. So, where does that leave companies like StubHub? In hot water, it turns out.
Events canceled left and right, but StubHub refused to return the money spent on tickets. This caused a Wisconsin man to file a $5 million class-action lawsuit against the company. This bad publicity plus COVID cancellations could cause StubHub to go under (even with all of its insane fees it charged over the years).
This year has been especially hard on movie theaters around the globe. Many of them shut down temporarily but opened once restrictions started to lax. Regal is still having a hard time, though. With most major films being postponed, parent company Cineworld has decided to shut down all theaters once again in the United States – all of them.
While some closures are simply temporary, many are permanent. This comes after a billion-dollar loss for the year. Admission dropped a whopping 65.1%, according to Hollywood Reporter. More theater closures are some to come as admission continues to decline and money is lost.
AMC is the world’s largest theater chain, but a press release in March stated that it has “substantial doubt” that it will remain in business following the pandemic. AMC has been pretty vocal during the COVID crisis, slamming some film studios for releasing movies straight to streaming rather than hitting theaters first.
So far, the theater has lost about $2.4 billion in earnings for the first quarter, according to CNBC. On top of that, it has had a 22% drop in revenue year-over-year. The second quarter is expected to be worse, which will cause mass closures.
Bed Bath & Beyond
Bed Bath & Beyond has made some serious moves lately. In 2019, the company got rid of pretty much all C-Level employees. The goal: turn the company around into something successful. Well, that was before the global pandemic came into play.
Bed Bath & Beyond had to shut down stores like everyone else, which reduced sales. Major remodels were pushed back to next year, but that was the least of their concerns. Stocks plummeted in April, along with other retailers that have already or will soon declare bankruptcy. BB&B could join them.
Nordstrom does a lot of its business in-store, so when the government forced stores to shut down, the company furloughed most of its employees. The scariest thing for employees was a note the company sent out stating, “The longer our stores remain closed to the public, the greater impact it will have on our results of operations and financial condition.”
The note went on to say, “if our physical locations remain closed to customers for an extended period of time our financial situation could become distressed.” By May 2020, the company began permanently closing stores to combat the lack of sales and an increase in debt. Right now, it’s just 50, but that number could increase quickly and without notice.
Sure, food has been easy to sell during the pandemic, but GNC hasn’t been able to cash in on that train. Before COVID-19 even reached America, GNC said that it had to close 304 stores. Shutting down hundreds of stores is a red flag.
By March, S&P Global Ratings downgraded the credit rating because of “likely inability to repay debt.” People probably aren’t interested in health supplements and overpriced food during the crisis. GNC hasn’t made another announcement of more store closures, but we expect them to come soon.
Norwegian Cruise Line
Cruise lines have had a notoriously rough time during the coronavirus. No one wants to become the next Diamond Princess situation. Norwegian Cruise Lines is one of the company’s that are really struggling, which caused them to file for bankruptcy.
Forbes reported that Norwegian Cruise Lines saw a 20% decrease in stock. The company stated that the reason is that COVID-19 has had a “significant impact” and that things aren’t expected to improve any time soon. In December, the brand said it had roughly $6 billion in debt.
Pier 1 Imports
Pier 1 Imports has never been really known for quality, long-lasting items, so customers didn’t exactly flock to the store. Once coronavirus hit, the brand had to close down all stores temporarily. However, that “temporary” turned permanent by May. The store filed for bankruptcy and began liquidating all assets in-store.
Pier 1 Imports has hope that the e-commerce store will still survive. It’s looking for a purchaser, but we doubt anyone would be brave enough. If the price is right, someone may take the bait, but this isn’t the first time Pier 1 has had issues with finances.
Party City began closing locations before coronavirus was even a thought in anyone’s head. Back in March 2019, it shuttered 45 locations. That may not seem like much until you learn that the company has around 900 stores.
COVID just made it even more difficult for Party City to break even. It began an attempt to reduce $2 billion in debt as social distancing ramped up and social gatherings were canceled. Rather than filing for bankruptcy, Party City is attempting to strike a deal with debtors.
Best Buy has strong competition with Amazon and Walmart, so the coronavirus pandemic really threw a wrench in their revenue. Best Buy took immediate steps to have people purchase and pick up items via curbside, with some employees utilizing technology to take items to customers without person-to-person contact.
Sales have only slipped 6%, according to the Wall Street Journal. The problem lies in the fact that Best Buy had issues before that. Couple that with 51,000 furloughed employees, and you have a terrible situation. Unless they open back up and resume normalcy soon, we may see another bankruptcy.
Tuesday Morning is another one of the retailers on the long list of coronavirus-caused bankruptcies. On May 27, 2020, Tuesday Morning filed for Chapter 11 bankruptcy, saying that it would close around 230 of its 687 stores – that’s a pretty hefty chunk.
Thankfully, the bankruptcy proceedings have been kind toward the retailer, but that still doesn’t mean they’ll survive the rest of the pandemic. TJ Maxx has overshadowed the company and is remaining strong throughout the whole catastrophe.
We may not think of companies like Revlon being affected by the coronavirus, but it was hit harder than we realize. Since people are in lockdown, they aren’t wearing or purchasing cosmetics like they were before. Revlon has had declining revenue since the pandemic broke out, so steps were necessary to avoid bankruptcy.
Revlon managed to secure $1.8 billion in refinancing, but it stated there would be further cost-cutting measures. That’s likely to come in the form of mass layoffs and possible factory closures. As people return back to work, Revlon may bounce back.
Is Dillard’s that much of a surprise? We think not. Considering Dillard’s has many of its locations in malls, declining sales aren’t something new. The only problem is that malls were shut down during COVID-19. That meant Dillard’s had to focus on online sales, something it hasn’t excelled at.
On top of that, Dillard’s has been spending money left and right. The company spent $9 million on the remodeling a former Sears location in Richland Mall that opened in late May. That’s not the best use of money as employees are furloughed.
Kohl’s has been trying to remain afloat against huge e-commerce businesses like Amazon. When COVID-19 hit, Kohl’s had an even harder time. According to USA Today, Q1 sales plummeted by 44%. Now, the brand is trying to get things back up and running.
Kohl’s had the goal to open a quarter of its locations by the middle of May. The stores will still work on reduced hours, but it gets the ball rolling. The good news is that Kohl’s is better off than most as they’re not located in malls.
Unemployment has soared to levels that are close to those of the Great Depression. According to some sources, it’s actually over those levels. Naturally, people aren’t running to purchase jewelry, and that’s Signet’s industry. Signet owns brands like Kay Jewelers, Zales, Jared, and Piercing Pagoda.
Before the 2020 crisis, Signet had already begun closing hundreds of locations. While many of those were in malls, some were stand-alone stores that weren’t performing as well as hoped. Now, things are even tougher as people put diamonds low on their list of must-haves.
H&M is another fast-fashion retailer that’s been struggling for the last two years. In 2018, H&M had weak fourth-quarter sales, and in 2019, that didn’t improve as investors were concerned about their return in investment.
Once the coronavirus hit, people didn’t need to rush out to buy new outfits to stay at home. March saw a 46% decrease in sales, according to Diginomica, and online sales aren’t counteracting the drop. The response will be closing stores or employee layoffs.
Mom & Pop Stores
Mom & pop shops aren’t exactly “big name,” but they make up a huge sector of the restaurant and retail sector. For this reason, we felt like we should include them. If COVID-19 has severely impacted anyone, it’s mom and pop stores. Considering they have very little opportunity to get bailouts (like larger businesses and industries), these businesses have a harder time when they’re forced to shut down.
Some were considered non-essential, while others had a hard time obtaining supplies needed to keep business flowing normally. It also forced many of these stores to go online, something they weren’t originally set-up to do. Others just closed for good.
True Religion has been a bougie, high-class staple of some people’s (and celebrity’s) closet for years, but the brand has been struggling since coronavirus slammed the United States. In April 2020, the business applied for Chapter 11 bankruptcy stating that the pandemic had affected sales.
This wasn’t the first time they had filed, however. True Religion also filed in 2017, making this the second time in five years. The company’s financials are clearly a mess, making investors turn away. This could be the last we see of True Religion.
The first thing many states did was shut down hotels. That, coupled with flights being shut down, non-essential travel became non-existent. Hertz began to feel the hurt. Hertz wasn’t making any money, and so it was on the verge of bankruptcy.
According to USA Today, it had an estimated $17 billion in debt. Before it began proceedings, Hertz made an agreement to create a new strategy that would take the global pandemic into account. On top of that, it also laid off 10,000 people in April.
Lord & Taylor
Lord & Taylor may be going down the drain. According to a report from Reuters, Lord & Taylor has been moving toward bankruptcy amid the coronavirus pandemic. Even though restrictions are being lifted, the brand isn’t expected to survive the crisis – we’re talking liquidation here.
Lord & Taylor still has hope as it explores other options, like negotiating relief from creditors or attracting new investors. Le Tote only recently purchased the business, so we expected it to last longer. Closing stores could help, but it may also just buy time.
Sur La Table
Sur La Table may not be a household name for some, but for those in cooking, this name is everything. Sur La Table is a premium cookware company, and it’s had a significantly harder time staying afloat through COVID-19. The brand was forced to close stores and cancel cooking classes as part of the lockdowns.
Many are suspecting a bankruptcy filing soon, but the business is hoping to attract investors in one way or another. Considering that it only has about 125 stores, we’re not sure store closures will help much. Good luck, Sur La Table.