Who Survived?
For many retailers that were struggling before the pandemic even hit, the aftermath of coronavirus has been disastrous. With the economic shutdown and social distancing behaviors that are being enforced, many retailers are not surviving the pandemic. There are some retailers that are flourishing, however. Chains that have grocery components such as Walmart, Target, and Costco especially, are seeing record sales. Home improvement stores like Home Depot and Lowe’s are also doing well because many people have chosen to do some “redecorating” during the stay at home order. The increase in business has shown where peoples’ priorities lie when distressed during a crisis.
Notable Bankruptcy Filings
Here is a rundown of the major companies dealing with the large financial fallout of the coronavirus.
J-Crew: This massive New York apparel company filed for bankruptcy on May 4th after seeing a large slump in sales and battling mounting debt.
Neiman Marcus: The luxe department store filed for bankruptcy on May 7th. All of its stores including Bergdorf Goodman closed due to the virus with the company furloughing most of its workforce. That move placed nearly 14,000 people out of work.
True Religion: This denim retailer filed for bankruptcy on April 13. It was actually its second time filing for Chapter 11 bankruptcy in less than three years. True Religion said in its court filing that it would’ve preferred to wait out the financial instability and stay-at-home restrictions prompted by the outbreak, but “simply could not afford to do so.”
Virgin Australia: Australia’s second-biggest airline behind Qantas, and it announced on April 21 that it is undergoing the third party led restructuring that could potentially lead them to a sale. Virgin Australia was actually rejected for a 1.4 billion Australian dollar ($897 million) government loan before entering into what is the Australian equivalent of Chapter 11 bankruptcy proceedings.
Sweet Tomatoes/Souplantation:
Garden Fresh Restaurants, the owner of buffet chains Souplantation and Sweet Tomatoes, has chosen to file for Chapter 7 bankruptcy. The company also opted to liquidate its assets and close its doors for good. “Given FDA regulations, we don’t think we could reopen any time this year,” CEO John Haywood told Restaurant Business last week. The move means the end of a 42-year-old chain.