Major Bankruptcies Caused by Coronavirus
Brick-and-mortar businesses were already fighting to adapt and stay profitable in current times prior to the pandemic, and scores have been driven to bankruptcy since its emergence. Many household names in American society have gone through the motions of closing stores and laying off their employees while attempting to stay afloat amongst their competitors as online shopping and behemoths like Amazon dominate the market. In fact, the year 2020 began with over 4,000 companies filing for bankruptcy, and experts predict this was only the beginning.
See below for a list of major businesses that have filed for bankruptcy in 2020:
Despite filing for bankruptcy as early as May 2020, this well-known brand of apparel has been in trouble for years prior. As its stores have become victim to lesser foot traffic as most consumers now prefer to shop online, experts say that this brand would have succumbed to this fate regardless of the pandemic’s emergence.
The pandemic has brought forth stay-at-home orders and social distancing requirements that have significantly affected the success and profits of many gym chains. Gold’s Gym, specifically, closed 30 company-owned gyms in April before filing for bankruptcy in May.
As e-commerce has increased in popularity over the years, department stores have become less relevant and have since been struggling. Neiman Marcus is one example as this company has spent years acquiring a burden of insurmountable debt. After filing for Chapter 11 protection in May and temporarily closing 43 stores, Neiman Marcus will draw on $675 million in creditor funds to stay in operation for the following months.
J.C. Penney, another example of a department store that has suffered as a result of e-commerce, finally filed for Chapter 11 bankruptcy in May. Already struggling, the company succumbed to the effects of the pandemic and is now planning to close 240 stores.
As a result of the pandemic’s travel restrictions, rental cars have not been in demand. Because of this major blow, Hertz is now looking to acquire a loan to finance its operations since filing for bankruptcy.
Ann Taylor, Lane Bryant, Loft
All popular mall retailers that make up Ascena Retail Group, filed for bankruptcy in July. Ascena plans on closing 1,600 stores which include Lou & Grey, Justice, and Catherine’s stores. All of which have become victim to a significant decrease in foot traffic to brick-and-mortar stores.
California Pizza Kitchen
While other pizza companies have had a positive experience during the pandemic, relying solely on delivery and carryout, largely sit-down establishments have experienced quite the opposite. California Pizza Kitchen is one example of this as the company filed for bankruptcy in July; however, they still plan on keeping over 200 restaurants open at this time.
The parent company of Men’s Wearhouse and Jos. A. Bank, Tailored Brands, filed for bankruptcy in August after sales rapidly declined as a result of the pandemic. The company reported their first-quarter sales were down 60 percent as the demand for formalwear significantly decreased.
Frontline Media Solutions specializes in assisting these struggling businesses by improving marketing strategies and increasing sales revenue. We offer various services including social media advertising, digital marketing, out-of-home advertising, and digital printing to boost companies’ visibility during this unprecedented global pandemic.
Contact us today to learn more.