Retailers had already been struggling, and now they’re bearing the brunt of coronavirus’ impact. But a large gym brand and a major car rental company have also filed for bankruptcy recently.
Still, many other brands that have filed for bankruptcy with the intention of staying in business didn’t survive. Here are some US-based companies that filed in May:
Filing for Chapter 11 bankruptcy protection will help it “emerge stronger and ready to grow,” the statement continued.
The 55-year-old company intends to exit bankruptcy by August and said it is “absolutely not going anywhere.” Gold’s did shutter 30 locations in April, but it doesn’t intend to permanently close any more gyms.
The company has been in business since 1918, when it set up shop with a dozen Ford Model Ts. Hertz has survived the Great Depression, World War II’s near-total halt of US auto production and numerous oil price shocks.
By declaring bankruptcy, the rental car company says it intends to stay in business while restructuring its debts so it can emerge financially healthier.
“The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company’s revenue and future bookings,” the company said in a statement, noting that “uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated today’s action.”
It paid a total of $16.2 million to 340 executives on May 19 as part of a plan to keep them in place while the company attempts to reorganize, according to a filing with the Securities and Exchange Commission.
Coronavirus could be the final blow for 118-year-old department store stalwart JCPenney. It was already struggling to overcome a decade of bad decisions, executive instability and damaging market trends.
“Until this pandemic struck, we had made significant progress rebuilding our company,” CEO Jill Soltau in a statement, adding that the company’s efforts “had already begun to pay off.”
The company, which owns the preppy J.Crew and Madewell brands, expects to stay in business and emerge from bankruptcy as a profitable company. And Madewell, the fast-growing denim brand that had been slated for an IPO, will remain part of the business.
J.Crew Group was saddled by a heavy debt load since its 2011 purchase from private equity firms TPG Capital and Leonard Green & Partners in a $3 billion deal.
It had grown rapidly in the nine years since the transaction was completed, nearly doubling the number of stores. But it has also accumulated far more debt. It had $50 million of long-term debt on its books in 2010, before the deal was announced — and as of February of this year that number had ballooned to $1.7 billion.
The company operates nearly 500 stores including J.Crew’s factory outlets.
The company’s history goes back 113 years to its first store in Dallas, which is still its home base. The company also operates the Bergdorf Goodman and Last Call chains.
ITS fate was very possibly sealed in 2013 when Ares Management and the Canada Pension Plan Investment Board paid $6 billion in a leveraged buyout, taking the company private.
“The big issue with Neiman is that the [private equity companies] paid too much and layered on too much debt,” Steve Dennis, a retail consultant and former Neiman executive, previously told CNN Business.
CEO Steve Becker said the business was thriving before the pandemic. But the resulting temporary store closures and employee furloughs had “severe consequences on our business.”
“The complete halt of store operations for two months put the company in a financial position that can be effectively addressed only through a reorganization in Chapter 11,” he said in a statement.
The Dallas-based chain, which filed on May 27, said it will permanently close approximately 230 of its nearly 700 US stores.
–CNN Business’ Chris Isidore and Nathaniel Meyersohn contributed to this report.