All the Notable Companies that have Declared Bankruptcy During the Pandemic So Far
The coronavirus pandemic has dominated the greater part of 2020, with no end in sight. Businesses have been forced to close or operate under strict standards, leading to millions of Americans being furloughed or terminated from their jobs. The states are tentatively beginning to reopen, but the losses some businesses have already suffered were too great. Some of the companies that have filed bankruptcy due to the coronavirus pandemic could have been expected, but others may come as a complete surprise.
- J.C. Penney: So far, the department store has closed 150 of its 846 locations. It plans to eventually close a total of 242 locations in the bankruptcy. Some of these stores have makeup retailer Sephora locations inside of them, which will close as well.
- J. Crew: This clothing company was able to negotiate a $1.65 billion debt conversion as a result of its Chapter 11 bankruptcy filing.
- Neiman Marcus: Because of coronavirus, people have less money to spend on nonessentials like clothing, and have less places to wear it. The luxury department store can’t even blame its designer prices for the bankruptcy- it is closing 17 of its discount Last Call locations.
- True Religion: This is the denim company’s second bankruptcy in recent history. However, after filing April 13, 2020, the company has already secured restructuring financing and is preparing to exit the bankruptcy. Unless there is an unexpected delay, completing the bankruptcy in early July would make True Religion’s bankruptcy faster than a simple Chapter 7 for an average filer, which typically lasts 4-6 months.
- Brooks Brothers: As more and more Americans work from home, this upscale men’s retailer was forced into bankruptcy. As less people need Brooks Brothers’ suits, shirts, and ties, the company is closing locations to save on lease costs.
- Chuck E. Cheese: This restaurant chain, which serves up pizza and family fun, is struggling more than most pizza chains during the pandemic. The company even offered take-out menus under the name Pasqually’s Pizza & Wings to avoid customers being too embarrassed to order themselves Chuck E. Cheese pizza. Some of its locations will be closing permanently, but the company hopes to continue providing children with birthday parties and happy memories as businesses reopen.
- Sweet Tomatoes aka Souplantation: This restaurant chain is buffet style, with a focus on an extensive self-serve salad bar. The company was already struggling before the pandemic, and reopening is impossible under many states’ reopening rules. Operating in a post-COVID world seemed too steep a task, and the chain is closing all of its locations permanently in its bankruptcy.
- NPC International: Despite more and more Americans relying on delivery and takeout, this company had previously amassed nearly $1 billion in debts and was still forced to file bankruptcy. This company is best known for owning Pizza Hut franchise locations. The company owns not only 1,200 Pizza Hut locations, but also 400 Wendy’s locations.
- Pier 1 Imports: The home decor store with worldwide influences is closing all of its locations in the bankruptcy, but is considering branding deals with potential buyers.
- Sur La Table: The luxury kitchen supplier reported almost $500 million in debts in its July 8th filing. The company is preparing to sell to Fortress Investment Group.
- Papyrus: A paper goods company that has become a mainstay at shopping malls is closing all 254 of its locations. Unfortunately, this will result in more than 1,000 job losses.
- Tuesday Morning: This discount home goods store is akin to Marshall’s and Ross. It is closing approximately 200 of 700 of its locations.
- Gold’s Gym: One of the company’s strategies to successfully emerge from bankruptcy is to focus on smaller (therefore, less expensive and more realistic to open) franchise locations.
- 24 Hour Fitness: Gyms were forced to close for months, and some states that did reopen gyms have had to close them again due to a resurgence of the virus. The gym chain is closing 130 locations so it can focus its resources on updating and improving more key locations.
- GNC: Approximately 30% of GNC’s stores were closed due to coronavirus measures. The vitamin and supplement retailer is closing 1,200 of its 5,800 locations in Chapter 11 bankruptcy.
If you find yourself in a similar situation as the listed businesses, please call our Phoenix Bankruptcy Attorneys for a free consultation. Learn your debt relief options. Get you and your family on the road to financial freedom. Our Arizona Debt Relief Office offer free consultations. Contact Us Today. Call us at (480) 263-1699 today.