1. Neiman Marcus
> Industry: Luxury goods
Luxury department store chain Neiman Marcus filed for Chapter 11 bankruptcy protection on May 7 in an attempt to restructure debt and survive the harsh economic conditions created by the coronavirus pandemic. The company had been saddled with $4 billion in debt since its 2013 sale to a private equity firm.
Issues had been compounded by the recent precipitous drop in sales of luxury goods, which were likely some of the first purchases to be postponed during the pandemic. At the time of filing, all of the retailer’s locations had been closed and most of its 14,000 employees had been furloughed.
> Industry: Live events ticketing
With virtually all live events canceled for the foreseeable future, ticket exchange and sale company StubHub is facing an unprecedented situation. StubHub updated its refund policy as more than 20,000 events were nixed. Company President Sukhinder Singh Cassidy told Axios that the company was unable to “take the risk of giving refunds to buyers before recouping the same refund from the seller.” This elicited lawsuits from fans who say they never got refunds despite the NBA, NHL, and MLB postponing their seasons and despite the company’s own refund policy.
StubHub furloughed most of its staff — around 300 people. The crisis also came at a time that StubHub’s $4 billion buyout from Viagogo was halted by U.K. courts in February. The National Association of Ticket Brokers say they may have to seek a government bailout to keep the industry afloat. The National Association of Ticket Brokers represents dozens of U.S. ticketing companies, although StubHub is not a member of the organization and has not requested any government assistance.
3. J.C. Penney
> Industry: Retail
J.C. Penney’s multi-billion dollar debt load, combined with the chain closing most of its stores nationwide because of COVID-19, has cast the company’s future into doubt. J.C. Penney is reportedly mulling a bankruptcy filing and recently said it did not make a $12 million interest payment due in April.
4. AMC Theatres
> Industry: Theaters
AMC Theaters was reportedly considering entering bankruptcy in April, but then was looking at raising half a billion dollars through a private placement debt offering. This may have staved off the bankruptcy option at least for the time being.
Although some states are now allowing movie theaters to reopen at reduced capacity, AMC said it is not anticipating a reopening until late June at the earliest. The company closed all theaters in mid-March and furloughed or laid off over 26,000 employees. With no ticket sales, AMC Theaters told its landlords it would stop paying rent in April.
> Industry: Department store
Once an American icon, Sears has struggled for years. In the years since 2010, its last profitable year, the retailer reported losses of $12 billion. After filing for bankruptcy in 2018, Sears continued to shrink operations after restructuring its debt, closing another 100-plus stores since, and staying with just under 200 stores, a fraction of the over 3,000 locations it operated at the beginning of the 21st century.
The coronavirus may be a death sentence for Sears, as all locations have remained closed as of early May. While all large brick-and-mortar retailers are facing challenges with the pandemic and the rise of e-commerce, Sears’ shaky financial footing makes it uniquely vulnerable.
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