Due to pandemic mitigation measures (shelter in place, social distancing, and mandatory shut-downs), falling consumer demand continues to take a toll on the retail industry, forcing many businesses to file for chapter 11. While this is an unwelcome disruption to the economy, it should be noted that bankruptcy is more of a financial restructuring than it is a complete cessation of business activity. Ownership changes hands; while commerce is typically sustained–even if in abbreviated form.
Clothing retailers filing for chapter 11 include Brooks Brothers, J. Crew, True Religion, Rubie’s Costume Company, Neiman Marcus, and JC Penney. This has also occurred with Ascena Retail Group–which operates Justice, Ann Taylor, LOFT, and Lane Bryant. Meanwhile, Lucky Brand apparel has been acquired by SPARC Group, which owns Aeropostale and Nautica. Home goods proprietor, Pier 1 Imports, was unable to find a buyer.
Hertz (which owns Dollar and Thrifty) is also scrambling to find new shareholders. Meanwhile, Sur La Table (the French-inspired cookware retailer) as well as Stage Stores (parent company of Bealls, Goody’s, Palais Royal, Peebles, Gordman’s, and Stage Parent) are clamoring for financial restructuring. Finding capital infusion is the name of the game.