The negative effects of the coronavirus pandemic continue to impact businesses across the world, with hundreds of big companies filing for bankruptcy in the US and globally. Over 21 major companies and retailers have filed for Chapter 11 protection in the US this year since COVID-19 emerged, and nine of them filed for bankruptcy this month of July alone.
According to New Generation Research which manages BankruptcyData.com, almost all the major companies were impacted by the coronavirus pandemic and the changing habits of shoppers because of the resultant lockdown. Many of the affected companies have existed for more than a century across 50 countries of the world.
“A retail sector already in upheaval in the face of changing consumer habits in 2019 is now additionally faced with a massive demand shock for which there is no cure,” said James Hammond, CEO of New Generation Research. “Storied names in the industry, some operating for over 100 years, have fallen. Even the strong can’t survive. This is far from over.”
Prior to and after declaring bankruptcy, most of the big chains in the US have closed thousands of their stores across several states and laid off thousands of workers too. Here are the nine that filed for federal protection this month of July among the others that did the same this year:
NPC International
This company is behind Pizza Hut and Wendy’s restaurants across the US. With 1,200 Pizza Hut outlets and 400 Wendy’s eateries in 27 states, the company employs almost 40,000 workers but is filing for bankruptcy because it owed about $1 billion.
Lucky Brand
The denim wears company is closing 13 of its 200 stores across North America because of the severe impacts of COVID-19 which affected sales. The company may be acquired by another company.
Brooks Brothers
With about 250 stores in the US, Brooks Brothers is a menswear company that has existed for nearly 200 years. About 40 US presidents have been dressed by this major retailer but it is shutting down many of its stores and finding a buyer to take over the business because of the difficulty brought on by coronavirus lockdowns.
Sur La Table
Having existed for nearly 50 years in the kitchenware niche, Sur La Table is shutting down about 60 of its 120 US stores and shopping for a buyer because of the terrible business situation brought about by the coronavirus pandemic.
Muji
A Japanese retailer of clothing, stationery, and internal decorations among others, Muji is going fully online and closing many of its US stores because of the “devastating effects of the COVID-19 pandemic on in-store retail.”
RTW Retailwinds
The women’s retailer has filed for bankruptcy and is looking for a buyer as a result of “significant financial distress” occasioned by the COVID-19 lockdown. The company will be shutting down many of its 400 stores and laying off many of its 5,000 workers as soon as a buyer is found.
Heritage Brands
This clothier will be retrenching about 450 workers and closing 162 stores across the country. However, its subsidiary brands such as Van Heusen, Izod Golf, Olga, Warner’s, and Arrow among others will remain available in the market. It hasn’t filed for bankruptcy yet.
Tailored Brands
This retailer is the owner of Men’s Wearhouse, Jos A. Bank, and K&G among others. The retailer is closing about 500 of its 1,500 US stores and cutting 20% of executive corporate positions due to the effects of COVID-19. But the company has filed for bankruptcy yet. “Unfortunately, due to the Covid-19 pandemic and its significant impact on our business, further actions are needed to help us strengthen our financial position so we can navigate our current realities,” said CEO Dinesh Lathi.
Ascena Retail Group
This retailer owns Ann Taylor, LOFT, Lane Bryant, Catherines, Justice, and Lou & Grey among others. Although the company had been suffering financial distress before the advent of the COVID-19 pandemic, the company is cutting down on around 500 of its close to 3,000 stores across the country. It filed for bankruptcy recently with interim executive chair Carrie Teffner saying the pandemic has eaten deep into financial margins the company enjoyed before this time.
Source: cnn.com