> Industry: Retail
JCPenney’s multi-billion dollar debt load, combined with the chain closing most of its stores nationwide because of COVID-19-imposed restrictions, have cast the company’s future into doubt. The department store chain filed for bankruptcy in May, and in June, it announced it would close nearly 150 of its 846 stores. Company CEO Jill Soltau blamed the pandemic for the closures, saying, “Until this pandemic struck, we had made significant progress rebuilding our company” under a reorganization plan.
2. 24 Hour Fitness
> Industry: Fitness
Gyms around the country, including 24 Hour Fitness, were shuttered as a result of COVID-19. The company filed for bankruptcy on June 15, blaming the filing on the pandemic. The fitness chain permanently shuttered over 130 of its locations, leaving around 300 gyms. Most remaining locations are expected to be open by the end of June. The pandemic only served to add to the challenges chains like 24 Hour Fitness were already facing as Americans switched to cheaper gyms, boutique fitness options like spin or barre classes, or home fitness options like Peloton.
3. J. Crew
> Industry: Apparel
Weeks after closing its doors on March 16, clothing retailer J. Crew filed for Chapter 11 bankruptcy. The company also said it reached an agreement with its lenders to convert more than $1.6 billion of the company’s debt into equity. J. Crew also secured a $400 million loan, though it may be increasingly difficult for the company to pay it back as its credit rating has been downgraded twice by credit rating agency Moody’s Investors Service during the pandemic. As of mid-June, the company had reopened two-thirds of its roughly 500 stores.
> Industry: Car rental
With more than $25.8 billion in assets, car rental company Hertz became the largest business to declare bankruptcy in the fallout of COVID-19 when it filed for Chapter 11 bankruptcy protection in May. With nonessential travel all but canceled, Hertz has been struggling with a lack of revenue.
After the bankrupt company’s recent attempt to raise money through a secondary share offering failed, Morgan Stanley analysts raised alarms that Hertz’s shares might soon become worth virtually nothing. Analysts also said Hertz is at risk of being delisted from the New York Stock Exchange and may not have enough cash to operate by the end of the year.
5. Chesapeake Energy
> Industry: Energy
According to a Reuters report, oil and gas company Chesapeake Energy is looking to file for bankruptcy as early as late June. It is reportedly seeking Chapter 11 protection as it struggles with over $9 billion in debt. The global oil industry was devastated by a historic plunge in oil prices stemming from a lack of demand during the global shutdown and a price war between Russia and Saudi Arabia. In April, the price of West Texas Intermediate oil futures set for May fell below zero for the first time. While prices have rebounded, they remain low, hovering under $40 per barrel throughout June. Prices had been above $50 throughout 2019.