22 large companies closing stores in the US due to bankruptcy
Some shops and restaurants close forever, writes GOBankingRates.
On July 8, Brooks Brothers was the last company to date to file for bankruptcy during 2020, which has become financially violent for many businesses. The retail chain announced the closure of 51 stores as a result of the coronavirus pandemic.
“Over the past year, Brooks Brothers' board of directors, management, financial and legal advisors have been evaluating various strategic options for the future of the company, including the potential sale of the business,” a Brooks Brothers spokesman told CNBC. "COVID-19 has become extremely destructive and has damaged our business."
Many retailers, restaurants and other major brands have barely made ends meet in a pandemic, and the recent economic downturn caused by coronavirus may be the last straw for some of these companies. Aside from Brooks Brothers, here are 21 more companies that filed for bankruptcy in 2020.
1 Hour Fitness
- Number of closing points: 100
National Sports Network 24 Hour Fitness filed for bankruptcy on June 15 after closing due to a coronavirus pandemic.
“If it weren't for COVID-19 and its devastating consequences, we would not have applied,” said CEO Tony Hubert. "We expect to have substantial funding with the ability to restructure balance sheets and operations to ensure a sustainable future."
About 300 more sports clubs of the company are still operating in the USA.
2. Advantage Rent A Car
- Number of closing points: 21
In May, the company filed for bankruptcy and the closure of about 40% of US offices.
“We have been hit by a simultaneous reduction in travel, significantly higher costs and frozen credit markets,” said spokesman John Austin.
3. Chuck E. Cheese
- Number of closing points: 34
CEC Entertainment, the parent company of Chuck E. Cheese and Peter Piper Pizza, filed for bankruptcy protection on June 24 as a result of the closure due to a pandemic and existing debt. In its bankruptcy proceedings, the company indicated a debt of $ 2 billion and $ 1,7 billion in liabilities. CEO David McKillips said the coronavirus pandemic is "the most difficult event in our company's history."
McKillips expressed the hope that bankruptcy protection would help the company stay afloat. Finally 34 out of 555 locations will be closed.
4. Dean & DeLuca
- Number of closing points: 0
New York-based grocery chain Dean & DeLuca had already closed all of its branches without a franchise by the time it filed for Chapter 11 bankruptcy. At the time of incorporation, the company had only one employee and $ 500 million in liabilities. Dean & DeLuca had hoped to file for bankruptcy conclude a restructuring agreement that would allow them to reopen their stores.
- Number of closing points: 0
On January 23, Fairway filed for bankruptcy and plans to sell the remaining unclosed 14 seats. Increased local competition from Whole Foods and Trader Joe's, as well as online stores such as Amazon and Fresh Direct, made Fairway afloat difficult to maintain. CEO Abel Porter said he hoped the sale of stores would lead to "long-term success with a new owner."
- Number of closing points: up to 1200
A store of vitamins and nutritional supplements had already accumulated $ 1 billion in debt before the pandemic, but orders for the need for self-isolation violated refinancing plans. Now the retailer can close up to a quarter of its stores.
“The process outlined in Chapter 11 will allow us [...] to invest in appropriate areas for future development, while improving our capital structure and balance sheet,” the letter to buyers said.
7. Gold's Gym
- Number of closing points: 30
Gold's Gym struggled to recover from the closure of gyms associated with coronavirus. On May 4, the fitness network filed for bankruptcy “to facilitate the company's financial restructuring. This preliminary arrangement will allow us to become stronger and more prepared for growth. ”
“The COVID-19 pandemic prompted us to take immediate action, including the difficult but necessary decision to close some 30 gyms to maintain the strength and growth of the brand's potential, and to ensure the continued viability of the company for decades to come,” the statement said. "We are working with our landlords to ensure that the remaining gyms reopen."
- Number of closing points: N / A
Hertz Global Holdings Inc., which owns Dollar and Thrifty car rental brands in addition to Hertz, had more than $ 24 billion in debt by March, and by mid-March had lost all revenue due to the termination of travel due to coronavirus. Unable to pay creditors, Hertz filed for bankruptcy on May 22. After filing for bankruptcy, the company put up for sale thousands of its rental cars.
9. JC Penney
- Number of closing points: 242
JC Penney was already in debt due to lower sales and unsuccessful strategic decisions before the coronavirus pandemic, and because of the closure of stores during quarantine, things got worse. At the time of filing for bankruptcy, the company owed $ 4,2 billion. The company said it planned to close about 29% of its 845 stores.
10. J. Crew
- Number of closing points: 0
On May 4, the J. Crew Group, which operates the J. Crew and Madewell brands, became the first US national retailer to seek bankruptcy protection after the closure of stores associated with the coronavirus pandemic. Despite this, the company said it planned to reopen all of its J. Crew, Madewell stores and factories after lifting the quarantine restrictions.
11. John Varvatos
- Number of closing points: N / A
On May 6, representatives of the John Varvatos luxury men's clothing brand announced that the company voluntarily filed for bankruptcy under Chapter 11 to facilitate the sale of the brand to one of its existing investors, Lion Capital.
“Like the rest of the luxury retail industry, John Varvatos Enterprises has been negatively impacted by the coronavirus pandemic,” the company said in a statement. - In response to the spread of COVID-19 and government orders, the company has taken difficult but sensible steps to temporarily close all stores and save money. The restructuring agreements represent an attempt to preserve the company's legacy and reposition the reorganized enterprise for long-term success. ”
Although the company temporarily closed all 30 of its stores due to an outbreak of coronavirus, it did not announce plans to permanently close any locations.
12. Le Pain Quotidien
- Number of closing points: 63
The company filed for bankruptcy under Chapter 11 at the end of May, citing the consequences of closure during a pandemic. In accordance with the restructuring plan, Le Pain will sell its 98 locations in the USA to Aurify Brands, which owns other restaurant franchises, including Five Guys Burgers. 35 stores are expected to remain open.
13. Lucky Brand
- Number of closing points: 13
On July 3, Lucky Brand filed for bankruptcy under Chapter 11 as part of a plan to sell all of its assets to SPARC Group LLC, which owns a number of retail brands, including Aéropostale and Nautica.
“The COVID-19 pandemic has seriously impacted sales across all channels,” Lucky Brand interim CEO and executive chairman Matthew A. Caness said in a press release. “Although we are optimistic about store openings and the return of our customers, the business has not fully recovered yet. We made many difficult decisions to keep the company alive during these unprecedented times. After reviewing all options, the Board has determined that filing a Chapter 11 application is the best way to optimize operations and ensure long-term brand success. ”
As part of the bankruptcy process, Lucky Brand closes 13 of its 200 North American stores.
14. Modell's Sporting Goods
- Number of closing points: 153
Modell's Sporting Goods chain on March 11 announced the bankruptcy and closure of all of its 153 stores in the northeast. A bankruptcy petition was filed just before retail outlets closed due to coronavirus. Instead, growing competition and a shift to online sales have caused Modell's financial problems. CEO Mitchell Modell said the liquidation decision was caused by "an extremely difficult environment for retailers."
“This is certainly not the result I wanted and this is one of the hardest days of my life,” he said in a statement.
15. Neiman Marcus
- Number of closing points: 0
The company filed for bankruptcy on May 7. A retailer with a 113-year history had financial problems, and the situation worsened when it was bought by a private investment company in 2013. Failure to attract new customers only exacerbated the problems and the retailer’s debt reached $ 5 billion by 2019.
- Number of closing points: 254
Papyrus announced it would close all of its outlets after Schurman Fine Papers' parent company announced bankruptcy in January. A stationery and postcard company indicated a general decline in retail sales as well as rising costs as the reason for its bankruptcy.
17. Pier 1 Imports
- Number of closing points: 541
Pier 1 Imports announced bankruptcy in February, expressing the hope that there is a buyer who can keep the business. The coronavirus pandemic thwarted these plans, and in May the company announced the closure of all 541 retail offices.
“This decision follows months of work to find a buyer who will continue our business in the future,” said Robert Riesbeck, CEO and CFO of Pier 1. “Unfortunately, the challenging retail environment is largely compounded by the profound impact of COVID-19 our ability to protect such a buyer and demanding that we wind down the business. "
- Number of closing points: 7
Canadian clothing retailer Roots announced in April that it was closing 7 out of 9 stores in the US, as its US subsidiary, Roots USA Corp. filed for bankruptcy under chapter 7. Interim CEO Megan Roach said stores are already losing money, and a pandemic only exacerbates the situation.
19. Sur La Table
- Number of closing points: 51
On July 8, the company announced that it had filed for bankruptcy under Chapter 11 to complete the sale of several of its Fortress Investment Group outlets.
“This sales process will revitalize Sur La Table to thrive in the post-COVID-19 retail environment,” said Jason Goldberger, CEO. "The company will have an optimized balance sheet and retail area to ensure a brighter future, continuing our nearly 50-year tradition of providing customers with high quality culinary products and experiences."
As part of the restructuring, the luxury retailer planned to close 51 out of 121 stores.
20. True Religion
- Number of closing points: 8
The company filed for bankruptcy under Chapter 11 in April after it accumulated approximately $ 138,5 million in secured debt and another $ 44 million in debt to unsecured creditors. In June, the company announced a restructuring plan that called for the closure of 8 stores, although the plan was eventually declined.
For the company, this application was the second in three years. The company said that the coronavirus pandemic and the resulting closure of stores negatively impacted its business.
21. Tuesday Morning
- Number of closing points: 230
At the end of May, it was announced that bankruptcy protection was filed under Chapter 11 with plans to close more than a third of stores. The retailer had financial difficulties before the pandemic, which exacerbated the situation.
“Before the pandemic, we were gaining momentum, expanding our supplier base, and improving brands, range and value to our customers by investing in a technology and corporate leadership team,” said CEO Steve Becker. "However, a complete shutdown of the store within two months puts the company in a financial position that can only be effectively addressed through a Chapter 11 reorganization."
The company planned to permanently close 230 of 687 stores during the summer, although it hopes to eventually stay in business.
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