American Businesses That Might Not Survive Coronavirus

Stein Mart, a discount retailer that has 279 locations in 30 states, declared bankruptcy in July. Though already struggling, the company said the COVID-19 pandemic caused much of its financial distress. The chain began liquidation almost immediately after filing for Chapter 11 bankruptcy protection and plans on closing all of its stores for good.

Ascena Retail Group, the company behind brands such as Ann Taylor, LOFT, Lane Bryant, and other women’s retailers, filed for bankruptcy in July. Like many other brick-and-mortar retailers on this list, Ascena was struggling before COVID-19, reporting only one profitable year in the last five. Under the bankruptcy agreement, the company will shut down about 1,600 of its 2,800 retail stores in an attempt to reduce its debt load.

RTW Retailwinds, the company behind women’s clothing store New York & Co. filed for bankruptcy on July 13, 2020. Already struggling because of the rise of e-commerce, the retailer’s problems were exacerbated by COVID-19. New York & Co. locations were reopened during the pandemic for liquidation sales. In August, the company announced a deal to sell its online business to Sunrise Brands LLC for $20 million in cash and the assumption of liabilities.

Faltering sales during the coronavirus pandemic led Brooks Brothers, a two-century old clothing retailer, to file for bankruptcy in July 2020. The brand, known for its preppy clothing and suits, reported steep sales decline as American consumers began to favor more casual clothing during the pandemic.

Brooks Brothers was purchased in August by Sparc Group — which has acquired other clothing brands during the pandemic — to the tune of $325 million. Under the terms of the reorganization, the chain will likely shutter many of its 250 brick-and-mortar stores.

Lucky Brand, a clothing company known for its denim jeans, declared bankruptcy on July 3, 2020. According to a company press release, the COVID-19 pandemic had a severe impact on sales. As part of its restructuring plan, the company will permanently shutter 13 North American brick-and-mortar locations and sell itself to Sparc Group, a company that has bought other bankrupt retailers, including Aeorpastle, Brooks Brothers, and Forever 21.

NPC International is a franchising company that operates about 1,200 Pizza Hut and 400 Wendy’s restaurants. The company, based in Leawood, Kansas, declared bankruptcy on July 1, 2020. As part of its restructuring plans, NPC will sell all of its Wendy’s businesses and focus on Pizza Hut. Even before the added strain of the COVID-19 pandemic, the company was struggling. NPC missed an interest payment in January 2020, which led to a credit downgrade. It also received $35 million in emergency liquid capital the same month.

Following the COVID-19 forced shutdown of 1,200 of its U.S. brick-and-mortar locations, vitamin and nutritional supplement retailer GNC filed for bankruptcy in late June. Already before the pandemic GNC’s financial situation was poor, and it had closed hundreds of stores in both 2018 and 2019 in an attempt to reduce its debt load. The company’s future remains uncertain as it weighs restructuring options that range from asset reduction to selling itself to a Chinese pharmaceutical company.

CEC Entertainment, parent company of Chuck E. Cheese, a popular venue for children’s birthday parties that features pizza and arcade games, filed for Chapter 11 in June 2020. Saddled with nearly a billion dollars in debt, the company was already struggling when the COVID-19 pandemic forced it to temporarily shutter its 560 locations. Many of those locations have since reopened, and experts speculate that the company will likely survive the pandemic but will likely emerge looking much different.

The company lacked the liquidity to get through the bankruptcy process and was recently given a $200 million lifeline to find a buyer.

JCPenney’s multi-billion dollar debt load, combined with the chain temporarily 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 announced in June it would close nearly 150 of its 846 stores. The company disclosed in September it struck a deal to be purchased by a group of mall owners and bankruptcy lenders. However, the company missed a filing deadline and asked for a four-month extension on both that deadline and its reorganization period.

Gyms around the country, including 24 Hour Fitness, were shuttered as a result of COVID-19 in the earlier months of the pandemic. The company filed for bankruptcy on June 15, blaming the pandemic. The fitness chain permanently shuttered over 130 of its locations, leaving around 300 gyms, many of which have reopened since with restrictions. Many state and local governments are still barring gyms from operating at full capacity.

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.

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 in the earlier months of the pandemic, Hertz has been struggling with a lack of revenue.

As it navigates bankruptcy proceedings, Hertz will move on to its third CFO in just a few months, as it was announced R. Eric Esper would leave the post Nov, 1 after taking over just in August. The company was blocked from selling stock amid its bankruptcy and it is currently seeking a loan of up to $1.5 billion.

Oil and gas company Chesapeake Energy filed for bankruptcy in June after losing over $8 billion in the first quarter of 2020, adding to an already substantial debt load. The global oil industry was devastated by a price war between Russia and Saudi Arabia and a historic plunge in oil prices stemming from a lack of demand during the global lockdowns in the earlier months of the pandemic. 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 through September. Prices had been above $50 a barrel throughout 2019.

While many companies use their time in bankruptcy protection as an opportunity to lower debt and streamline operations, Lord & Taylor has shut down for good. Lord & Taylor announced in August, just a few weeks after filing for bankruptcy protection, that all of its remaining stores would permanently close. Lord & Taylor, which opened in 1826, was considered the oldest department store in the country. The store was struggling with the same issues many department stores were facing even before the pandemic, experiencing declining revenue and lower foot traffic as online shopping became more common.

Home-decor retailer Pier 1 Imports was struggling already before the coronavirus pandemic. The company filed for bankruptcy in February and planned to close about half of its stores. Pier 1 began liquidation sales in May, but the brand may live on as an e-commerce destination. The company was purchased by Retail Ecommerce Ventures in July and debuted a new online marketplace in August.

After leisure and business travel ground to a halt in the earlier months of the pandemic, car rental companies were left with lots full of cars but no one to drive them. Advantage Rent A Car filed for bankruptcy on May 26, just a few days after car rental competitor Hertz. Advantage had also filed for bankruptcy protection in 2008 and 2013. The company is reportedly struggling with a debt load of around $500 million. In July, it sold 10 airport locations in places like New York, Boston, Houston, and Las Vegas to German rental company Sixt.

Sur La Table, which declared bankruptcy in July, was especially vulnerable to the pandemic compared to other brick-and-mortar retailers as the store is known for its in-house cooking classes. It had initially announced it would close 56 of its stores, but on Sept. 11 said that an additional 17 stores would shutter permanently.

Houston-based contract drilling business Diamond Offshore Drilling was forced to file for bankruptcy in April after many of the largest oil companies in the world pulled back on spending as oil prices collapsed. Worldwide, 2020 spending on oilfield equipment and services is predicted to drop to its lowest level in 15 years, with companies like Diamond Offshore Drilling experiencing the fallout.

CMX Cinemas owns 41 movie theaters that also serve food in major cities like New York, Chicago, Miami, and more. The eighth-largest theater operator in the U.S., CMX declared bankruptcy in April and had to pull out of a deal that would have expanded its footprint into Texas. So far, CMX closed one location in Georgia in September.

As movie distributors pushed the release of spring blockbusters to later in the year and theaters were required to close because of COVID-19-omposed restrictions, total movie sales in the U.S. diminished to a fraction of their earlier levels. From April through July, the U.S. box office did not break $1 million for any single week. For context, the 2019 box office total was at least $150 million each week in those same months.

Libbey may not be a household name, but chances are you are familiar with its products. The Toledo-based company is one of the leading providers of glassware to bars and restaurants, with sales totalling $782.4 million last year. As dining establishments closed, however, they had no need for new glassware, and sales at Libbey suffered. After sales dropped from about $10 million per week before the pandemic to less than half of that throughout much of March, the company declared bankruptcy. Libbey postponed its exit from bankruptcy twice since and now must have a plan by Oct. 26.

Retailer Tuesday Morning filed for bankruptcy on May 27. The discount homeware brand has over 687 stores in nearly 40 states, though as part of its filing, the company said it would close around 230 of those locations. The company is in the process of liquidating its assets.