2020 has been a difficult year for many businesses, with more than three dozen retailers filing for bankruptcy. J. C. Penney, the oldest department store chain in the country, was one of the most notable companies to file for Chapter 11 bankruptcy protection in mid-May.
The luxury department store Neiman Marcus also filed for bankruptcy in early May, and Guitar Center filed in late November. Tailored Brands, owner of Men's Wearhouse and Jos. A. Bank, filed for Chapter 11 in August, while Ascena Retail Group, parent company of Ann Taylor and Loft, filed in July.
GNC filed for Chapter 11 in June, and J. Crew and Stein Mart both filed in May. Pier 1 Imports filed for Chapter 11 in February and Brooks Brothers followed suit in July. Voyager Digital and Scandinavian airline SAS also filed for bankruptcy protection this year. J.
Penney was struggling long before the pandemic, but the Covid crisis exacerbated her problems. The retailer closed more than 150 locations since it filed for bankruptcy and plans to close another 15 stores in March. Neiman Marcus eliminated billions of debts and created a new board of directors that includes the former president of LVMH in North America, Pauline Brown, and the former strategy director of eBay, Kris Miller. The company is hoping to take advantage of the strong upturn in the luxury market as high-income consumers spend more on themselves while travel and other social activities are suspended. Guitar Center began its business in Hollywood in the 1950s selling organs for the home, but the temporary store closures caused by the pandemic harmed the company as shoppers turned to the Internet to buy instruments and sheet music.
Tailored Brands announced plans to close up to 500 stores before filing for bankruptcy, while Ascena made an increasing effort to grow her business as more women went to fast-fashion retailers such as H&M and Zara, to chains with discounted prices such as TJ Maxx and Ross Stores, and even to Target, to buy clothes. GNC said that the pandemic only exacerbated the financial pressure of recent years when it filed for Chapter 11. J. Crew had already been struggling with a heavy burden of debt and sales problems before filing for Chapter 11 in early May. The company hoped to spin off its Madewell brand into an IPO that could have helped pay its debt burden but faced rejection from creditors. Brooks Brothers was burdened by leases resulting from its real estate expansion over the years when it declared bankruptcy in July. Stein Mart applied for Chapter 11 protection in August and liquidated all 281 stores after shoppers turned to online retailers during the pandemic. Pier 1 Imports filed for Chapter 11 after nearly 60 years in business when its plans to find a buyer were unsuccessful due to worsening pandemic conditions in March.
Voyager Digital has filed for bankruptcy protection under Chapter 11 after exposure to the crypto hedge fund Three Arrows Capital which had filed for Chapter 15 bankruptcy protection a week earlier. Scandinavian airline SAS has filed for Chapter 11 bankruptcy protection after their pilots went on strike and wage talks were interrupted. Cryptocurrencies are also facing a crisis with Bitcoin losing nearly 60% of its value during the second quarter.
