Thousands of businesses have been driven to bankruptcy by the coronavirus, and you’ve likely never heard of most of them. But a handful of household names, many of them already struggling before the pandemic, are among the firms closing stores, laying off employees, and restructuring due the economic turmoil created by the virus. And while bankruptcy doesn’t often spell death for large companies, it can sometimes lead to liquidation of the business.
As of Monday, more than 4,000 companies have filed for bankruptcy in 2020, according to BankruptcyData.com. By comparison, 6,800 companies sought Chapter 11 protection all of last year. Experts predict that things are only going to get worse, the Times reports:
Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record for so-called mega bankruptcies — filings by companies with $1 billion or more in debt. And he expects the number of merely large bankruptcies — at least $100 million — to challenge the record set the year after the 2008 economic crisis.
Here are some of the biggest name firms to file for bankruptcy in 2020:
AprilDiamond Offshore and Whiting Petroleum: The two oil companies cited a steep decrease in demand during lockdown and the oil price war between Saudi Arabia and Russia.
MayJ.Crew: The Times called J.Crew the coronavirus’s “first major retail casualty” when its parent company filed for Chapter 11 protection in early May. The company has said “day-to-day operations” will continue.
Gold’s Gym: The gym chain proactively closed 30 company-owned gyms in April before declaring for bankruptcy in May. It said the decision will not “prevent us from continuing to support our system of nearly 700 gyms around the world.”
Neiman Marcus: After years of building an unsustainable debt burden, Neiman Marcus was brutalized by the coronavirus, which caused all of its 43 stores to temporarily close. The luxury chain is now considering closures around the country, including in Manhattan, where it opened a three-story, 188,000-square-foot behemoth at Hudson Yards just last year.
J.C. Penney: Prior to coronavirus, the footprint of the once-iconic mall retailer had fallen to less than a quarter of what it was in 2001. After its mid-May bankruptcy filing, it’s going to fall more. The company is planning to shutter 154 stores.
Hertz: If no one is traveling, no one needs to rent a car. Car rental giant Hertz was dealt a “rapid, sudden and dramatic” blow by the coronavirus, the company said in May, leading to the biggest bankruptcy filing of 2020.
Tuesday Morning: Pandemic-inspired shutdowns created an “insurmountable financial hurdle” for the off-price retailer, which is planning to close more than 200 of its 700 stores.
PQ New York: The owner of Le Pain Quotidien closed all 98 of its U.S. locations during the pandemic and sold them to another restaurant company that will reopen 35 of the locations and, presumably, close the rest.
JuneGNC: The 85-year-old vitamin retailer saw 30 percent of its stores in the U.S. and Canada temporarily close during the height of the pandemic. The “dramatic negative impact” of these closures led to a bankruptcy filing in late June. Roughly 20 percent, or 1,200 of its 5,800 retail stores will close.
24 Hour Fitness: After its bankruptcy filing on June 14, 24 Hour Fitness will transition 133 of its locations to Zero Hour Fitness. That is to say, they’re closing.
Chuck E. Cheese: On the same day that CEC Entertainment, which owns 550 Chuck E. Cheese and Peter Piper Pizza locations, reopened 266 venues, it also filed for bankruptcy. The company said the filing will allow it to “strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company’s history.”
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June 26, 2020 at 01:29AM
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All the Household-Name Companies That Have Filed for Bankruptcy Due to Coronavirus - New York Magazine
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