The truth of the matter is that more and more people are online. Of all the activities that can be done online, buying things is one of the most popular. It’s just too easy to order anything, from food to clothes to car insurance. Not only is it super convenient, but it’s usually cheaper, too.
So what does this all mean for physical brick and mortar stores? Well, it’s not good news. It’s actually really bad news. If retail chains and companies don’t get creative and adapt to today’s online market, they will start to drop like flies. Look at what’s happened to heavy hitters like Sears and Toys R Us!
These are American companies that are facing the reality of bankruptcy. They’re in debt by the millions and billions. So you might want to prepare for some major liquidation sales in the near future.
This clothing company favored by the former first lady has had to close some of its stores due to a major drop in sales over the years. Their bridal store also closed and parted ways with its creative director, Jenna Lyons, and CEO, Millard “Mickey” Drexler. Drexler admitted that he thought the company’s problems stem from raising the prices.
Drexler pointed out that J. Crew raised prices and went through an expansion during a period when consumers were becoming more thrifty. Drexler left his job at J Crew of 14 years to be replaced by former West Elm CEO Jim Brett. J Crew suffered nearly $2 billion in debt, but a debt exchange in June gave the company some relief.
Things aren’t looking so good for this department store chain. 1,000 employees were laid off in 2018, and one of the distribution centers were closed down. Top-line sales dropped by 0.3 percent in 2017 with a net income at $116 million. The company is just having a very difficult time making a turnaround.
JC Penney’s total debt is $4.2 billion. The company’s investors are growing impatient now with the slow progress that is being made. A lot of changes have been made within the company. One of the biggest being they switched out their CEO. Marvin Ellison left his role as board chairman in 2018 to lead Lowe’s.
The next huge chain might also be facing the cutting board soon due to strong competition…
99 Cents Only
The popular retailer that offers discount goods has found itself in a tough go lately, facing competition from companies like Dollar General, Dollar Tree, Walmart, and other cheap retail stores. In 2017, the company reported a net loss of $27.1 million on top of the $33.6 million in losses during the second quarter and $8.8 million in the first.
The 35-year-old company tried to make a big change years ago. The 99 Cents Only company was sold to Ares Management, Canada Pension Plan, and to a private family. The new CEO, Jack Sinclair, replaced Geoffrey Covert. 99 Cents Only is still losing major money, however. Only time will tell if they will be able to beat the competition. Is anyone else thinking it would be great to have a 99 cents store online?
Another major retailer, Office Depot, went through some hard times in 2017 with sales falling 7 percent and costing them $10.2 billion. The company’s CEO Gerry Smith announced that they would be making a shift from mostly retail sales to online sales, which will include services. They’re pushing up the company’s top-line. In May of 2019, the company closed down 50 retail locations. They closed down both Office Depot and OfficeMax, which is another store owned by the company.
One of their new business to business services is the “BizBox” subscription program. Investing in this service also included acquiring the IT firm CompuCom. The services now include 14 percent of Office Depot’s sales.
The next supplement line is facing adversity in this competitive market. Can you guess which store?
GNC’s top-line revenue in 2017 dropped by 3.4 percent year after year to roughly $2.5 billion. It also carried $1.3 billion in debt. The chief executive said that it was doing well in China though and in e-commerce in 2018.
In the second quarter of 2018, GNC had declines in top-line and comparable sales as well as profits. In February 2018, the company reported that it would sell 40 percent to a Chinese pharma company which will manufacture, market, sell and distribute products in China. Recently, GNC is said to be closing up to 900 retail locations. They are worried that a lot about 28% of the locations closing are in malls, which could essentially have an effect on the success of the mall.
In May of 2018, the 70-year-old pharmacy’s top-line sales in the past fiscal year dropped 4.3 percent, and its net loss was $139.3 million. Fred’s tried to get to 1,000 stores, up from 600, but their plans didn’t work out.
Fred’s CFO left in February 2018, which gave a former media executive room to step it. “Plan B” was put into place, and Fred’s went up for sale, selling to CVS for $40 million. Fred’s company recently had to file for Chapter 11 bankruptcy and while they had about 550 locations in the southeast U.S., they are now down to less than 80. They are trying to continue filling prescriptions at their remaining locations until they are forced to shut down.
Fans of Gymboree might be in for a surprise…
The children’s clothing company had to file for bankruptcy protection in January of 2019. The retailer said it’s planning to close all of its 800 Gymboree and Crazy 8 stores. But in a matter of months, they made the announcement that things have turned around. The brands have been sold. Children’s Place purchased both Gymboree and Crazy 8 brands. Meanwhile, the Gap purchased Gymboree’s Janie and Jack’s intellectual property, including its website and customer data.
The company also took away the severance plan, which had written in that they just need a majority vote to shut it down for any reason. They took advantage of that, and now over 400 employees are left without severance. Severance was also the reason that some of the employees took a job there in the first place. It is rumored that four people higher up in the company were given their severance in the form of a bonus.
The luxury retailer’s gross sales went down 5 percent to $4.7 billion in 2017’s fiscal year. Neiman Marcus tried a couple of things that seemed to work; their interest expenses are a problem. Some strategies were to cut over 200 jobs and develop a customer engagement plan called “Digital First.”
The Canadian company, Hudson’s Bay, considered buying Neiman Marcus. But in the end, the plan didn’t work out because Hudson’s Bay was concerned about the retailer’s declining sales.
After all of this, the company thought they were starting to do a bit better but saw some big losses in the third quarter of 2019. The same company which thought about purchasing Neiman Marcus in 2018 has heavily invested in the same area as their locations, and they are hoping that this won’t have too big of an effect on things.
The next home store is also in some troubled waters as of late…
Pier 1 Imports
In 2018, Pier 1 was in a heavy investment year, having addressed its sourcing, merchandising, marketing, pricing, store ops, e-commerce, and supply chain. Net sales fell by 9.2 percent year over year to $371.9 million.
Apparently, S&P Global analysts also took down Pier 1’s credit rating. Pier 1 reported that 60 percent of its goods are made in China and so their taxes have gone up recently.
Pier 1 recently came up with a strategy to shift to higher-priced, higher-margin goods. This year didn’t start out so good, and some people are saying that it might end up to be a failure. If this happens, the company will file for bankruptcy in as soon as a year. It is said that they could be closing up to 145 stores in the fiscal year.
The popular shoe store was $1.5 billion in debt and trying to figure out how to stay afloat. They were in “Chapter 11” bankruptcy and sold off certain parts of the company. Nine West has even sold off its Easy Spirit brand and closed all stores, except for a mere 25.
The Washington Post reported that Nine West Holdings would be focusing on jewelry and clothing lines (including Anne Klein, Kasper Grouper, One Jeanswear Group) instead of shoes.
Since then, Nine West is said to be emerging from bankruptcy. However, they also sold its Nine West and Bandolino footwear and handbag business at a court auction for $340 million, so who knows what will happen next.
David’s Bridal is another retailer looking at bankruptcy…
Due to many women looking for a more casual, less expensive wedding, the wedding industry like David’s Bridal experienced real drops in sales. The company has a $520 million loan due in 2019 and $270 million in unsecured notes to be paid in 2020. The store faced operational and market challenges as sales, earnings and margins dropping. To make matters worse, S&P Global downgraded their credit rating in June 2018. They’re going to need to get creative.
More recently, they reached a deal with their lenders to reduce the company’s debt by more than $400 million. This will allow them to leave more than 300 store locations open throughout the U.S., helping them emerge from bankruptcy without closing down any stores. The company is now focusing on dresses available in all sizes to have a broader range of customers, while reducing prices of some of their better selling items. They also have been focusing more on their e-commerce sales.
The pet product retailer has over 1,500 stores in the U.S., Canada, and Puerto Rico. But in June 2018, they needed to handle an $8 billion debt problem. And the problem they are having is the same problem all other stores are having.
Consumers are simply looking towards e-commerce these days due to how convenient it is, not to mention the generally lower prices. PetSmart did acquire an e-commerce site, Chewy, but paying the $3.35 billion for the site only added to its existing debt. The company actually charges less for products on the website than they do in the store, so everyone is leaning more towards buying online. However, will this be enough to get them through 2019?
Pregnant ladies – the next store is going under…
Destination Maternity is a real mogul in the maternity apparel industry having more than 1,000 stores. Its CEO left in 2018 when top-line sales dropped by 7 percent. The company brought the Berkeley Research Group to help it turn around. Destination Maternity’s relationship break from Kohl’s was the source of its problems. 2017’s fiscal year saw sales fall 6.3 percent to $406.2 million. It did, however, see a 40 percent increase in e-commerce sales.
At this point in time, they announced they are closing more than a third of its stores and filing for Chapter 11 bankruptcy. It is said that 183 stores will be affected by the bankruptcy, and while the decision was a hard one, it was necessary. It is also mentioned that this company has been through 5 CEOs in the past 5 years, so this could have something to do with it.
Ascena retailer owns companies like Ann Taylor, Dress Barn, LOFT, and Lou & Grey. But skies aren’t looking clear for them, even after the new chief came in for Dress Barn. To salvage the brand, they closed 25 percent of its Dress Barn locations across the U.S.
The brand had $1.7 billion in sales in 2017, but top-line sales fell year after year. Then again, the financial services company Moody’s said that Ascena “is on a path to developing a strong ‘backbone’ of retail capabilities.”
Now, they recently shut down hundreds of stores, and are said to close at least 30 more this year.
Those who know Stein Mart might want to know more about what their company forecast is…
While some companies decided to close up shop after finding themselves largely in debt, Kohl’s decided to be more preventative in their measures. Seeing a decline in mall shoppers, Kohl’s announced that they would close a few stores that are near to or inside of malls. Kohl’s described their mall-based stores as “low performing.” But management offered severance packages or the option to be transferred to their other stores to all of the employees at these closing locations.
Kohl’s is trying to get ahead of falling sales. This year, Kohl’s is said to be closing four retail locations. All of the locations which are being closed are either near, or inside of a shopping mall. If this doesn’t make you realize that e-commerce is taking over retail, then what will?
The next one on the list is another well-known department store…
The Jacksonville-based discount department store has been struggling with sales, but they’re still hopeful. Their sales stabilized, and digital sales went up by 47 percent in the third quarter of 2017. Their $23.4 million net loss shrunk to about 10 percent. The company announced that they are talking with P.J. Solomon, the company’s financial advisor, about different strategies on how to fix this.
In 2018, Stein Mart announced it hired advisors to help turn things around. They received a $50 million term loan, which could be increased. However, their sales did go down to $1.26 billion to $1.32 billion from the previous year, and their debt is at $153 million. This company has been back and forth in the past few years, so it looks like we might have to wait to see the fate of Stein Mart.
In 2017, the company’s owners (Golden State Capital) considered selling the company as one of many strategies in attempts to rid its debt. That same year, S&P Global downgraded their credit rating. But the company has been there before as it managed to emerge from bankruptcy in 2009. The sale to Golden State Capital saved it from bankruptcy.
The brand has been noted as having trouble keeping up with trends. This is also something that I noticed whenever I was out shopping at Eddie Bauer. The outdoors retailer is looking into a merger with Pacific Sunwear of California. This might be a good idea for staying in the know when it comes to trends.
Like GNC, another supplement chain is facing the heat…
It seems like vitamin retailers are not doing so well these days. Similar to GNC, Vitamin Shoppe has also struggled with drops in sales. But its aim is to strengthen its e-commerce business, and they started offering a subscription service. Yet the company’s top-line fell 8.5 percent in 2017 to roughly $1.2 billion.
Vitamin Shoppe and GNC are dealing with these issues due to the lessening popularity of malls as well as supplement store competition. Vitamin Shoppe is hoping to that category expansion, events, delivery services, and other things will make a difference.
Even more recently, they opened a 3,185 square-foot store, which is said to have on-demand digital product guides, mobile checkout, an area where shoppers can take a health assessment, a body composition analysis station, and a supplement sampling machine.
The fashion store’s sales suffered after creative director, Neda Mashouf, left in 2007. Her ex-husband Manny Mashouf founded Bebe in 1979. Just like almost every other store on this list, declining mall popularity is another reason for all of its challenges. In 2017, the operating loss was $4.6 million.
Bebe tried to stay afloat by moving into strictly e-commerce territory and paying out $65 million to get rid of all of its physical retail stores. Bebe had 180 stores at the end of 2016. So if you’re a fan of the brand, it’s online only now.
Did you ever shop at Land’s End? You might want to go soon, it looks like you won’t have much longer to check it out…
This casual clothing, luggage, and home furnishings store is resonating with consumers so much these days. The catalog items still have strong sales, but Lands’ End’s former CEO Federica Marchionni made some costly errors. One of these mistakes was the youthful Canvas brand, which meant to feature clothing in “designer styles to relaxed looks.” yet the brand wasn’t able to score its core clientele.
Back in 2002, Sears bought Lands’ End for $2 billion, and in addition to other things, allowed them to open locations inside of their own retail stores.
Lands’ End had 65 locations at the end of 2018, most of which are part of a Sear’s location. 16 of these locations are stand-alone stores. Since Sears Holdings filed for Chapter 11 bankruptcy, this year Lands’ End will be forced to close down all of their store locations within Sears.
As of 2018, the supplier of all things rock n’ roll has about a year to get out of a $900 million debt. Guitar Center has been around for over 50 years but seems like people are buying fewer guitars. Electric guitar sales declined by 36 percent from 2005 to 2016. Perhaps it’s the same issue as other retail locations, and everyone is purchasing this stuff via e-commerce.
The company was planning on opening new stores and even avoided a crisis by getting an emergency loan. The EVP of merchandising and e-commerce Michael Amkreutz says the company is in a transition but is still remaining afloat.
The next company had to do some major restructuring to be able to stay afloat…
The Winn-Dixie grocery chain’s operator, Southeastern Grocers, filed for a Chapter 11 bankruptcy protection plan to reorganize its debt. They lowered it by $600 million and closed 100 stores. The retailer shifted its focus to rebranding and remodeling the stores that are still open. Southeastern Grocers faces competition by stores like Walmart and Target as well as e-commerce like Amazon.
Southeastern is based in Florida but has stores in southern states like Alabama, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina.
The company has since come back from the bankruptcy, left with 575 stores. They remodeled a lot of the locations with updated produce sections, extended deli and meat counters and different sections throughout the stores with special prices. This seemed to have worked, as the company is said to be doing better.
Amazingly, this company has been around for 101 years. Which is a shame when it has to face bankruptcy and being closed down. Bon-Ton, the online retailer and department store, filed for bankruptcy last year and was even sold and liquidated. Then in October of 2018, it relaunched its e-commerce site and will open a select number of stores.
USA Today said: “The reinvented Bon-Ton would be sleeker, more e-commerce focused business.” Established in 1898, Bon-Ton experienced its prime in the 1900s and 2000s. The company is now said to be doing well. They even re-opened one of their original brick-and-mortar locations. They even have some locations in the mall.
Next, a company is still open for now, but about to close all its doors soon…
Companies that can’t keep up with changing consumer habits tend to fall. This is the case with Tops Market as more shoppers are interested in non-traditional food retailers. There’s also the falling food prices and competition. Tops filed for Chapter 11 bankruptcy.
The East Coast grocery stores will remain open (for now) in New York, Pennsylvania, and Vermont. The Buffalo News reported that in July 2018, the company was freed from the $80 million in annual interest payments.
Now, the company is doing a lot better and are trying hard to keep their stores open. The bankruptcy helped them get out of debt, but they still owe about $55 million in interest. This still seems better than having to close down all of their locations.
Claire’s has been one of those stores that you saw in just about every mall. The staple store was for girls to buy jewelry, accessories, and get their ears pierced. I even remember getting my ears pierced there when I was younger, and the bottle of Claire’s piercing cleaner was probably the most exciting part. It was founded in 1961 but recently stopped its IPO.
In March 2018, the retailer filed for Chapter 11 bankruptcy, planning to reduce its debt by $1.9 billion. They closed 130 stores by May 2018, and their plan is to market to potential buyers and investors. Claire’s is really hoping to be able to keep their doors open, and so far they seem to be doing better. However, only time will tell.
The next company used to be owned by Nike…
USA Today named Cole Haan as one of the 26 retailers that were most at risk in 2018. The company is hoping to keep up with the athletic shoe brand trend by changing its style from dress shoes to sneakers. Nike used to own Cole Haan, but it was sold to Apax Partners in 2013 and abandoned Nike’s comfort technology.
What Cole Haan did was build sneaker comfort into its dress shoes. The company has fewer retail locations, which really helped it get more into the e-commerce world more easily than other companies. However, they are known for being more expensive that most other brands on the same level. It’s now competing with Nike and just not staying above water.
Charlotte Russe just reported that they’re liquidating and closing all of their stores. When the company filed for bankruptcy in February 2019, it was planning to shut down 94 of its retail outlets. But in the end, they had to close down all 500 stores across the United States.
The company mentioned that they had trouble keeping up with their targeted market audience of teens and young adults. A liquidator won the auction for its business in bankruptcy court. Charlotte Russe stores have always been housed in malls, but as we know, malls are experiencing less traffic. This could definitely be part of the reason that they haven’t been doing so well.
Payless is a chain that is still going strong, despite closing down so many stores…
The shoe store filed for Chapter 11 bankruptcy, laid off its employees and closed over 600 of its stores in 2017. But Payless made a comeback in August 2017, despite S&P Capital Markets saying it’s still in danger of default.
Although they closed down so many stores, Payless still has enough stores to get back on its feet – 3,500. “We have accomplished our goals of strengthening our balance sheet and restructuring our debt load, positioning Payless to create substantial value for our stakeholders,” CEO Paul Jones said in 2017.
As of the beginning of 2019, the store is said to shut down twice as many stores as they thought they would have to. They are also planning on closing down their e-commerce operations.
FullBeauty Brands Holdings Corp
FullBeauty is a company that owns brands for plus-size men and women, including as fullbeauty.com, Woman Within, Roaman’s, Jessica London, ellos, KingSize, and Brylane Home. Like many other retailers, they blame Amazon for their plummeting sales. Earnings dropped 30 percent in the 2017 fiscal year’s first quarter. In July 2018, Bob Riesbeck came in as CFO, Liz White as chief customer officer and Robert Lepere as chief people officer.
This company set a record for the fastest U.S corporate bankruptcy. It only took them 24 hours to win court approval on their future plans. This company had one thing on their side which other companies didn’t usually, they didn’t have any of their own retail locations. Since all of their clothing was sold at other locations and via e-commerce, it was figured that they would be able to come back from this, and their plans were approved.
Ever needed to engrave a gift? See what’s happening with Things Remembered.
Things Remembered might become things forgotten as the company filed for Chapter 11 bankruptcy in February 2019. The company that makes personalized keepsakes such as engraved jewelry and bags with a loved one’s name on it is going downhill. This company was founded more than 40 years ago, but was more recently bought out by another company before filing for Chapter 11 and being bought out by Enesco.
But thankfully for Things Remembered, they will live on. Part of their court approval was asking for a severance and outplacement program to support all of the store employees who were affected by the bankruptcy. They were sold to gift and home decor business Enesco. The online, direct mail, B2B retail operations, and 176 of its physical stores will keep the Things Remembered name.
Bluestem Brands has apparel, electronics, appliances, and health and beauty products. It also has 13 e-commerce sites like Appleseed’s, Bedford Fair, Fingerhut, Draper’s & Damon’s, Blair, and Gettingon.com. But it’s on the list of at-risk companies.
The company saw a 10.9 percent decrease in net sales in the first quarter of the fiscal year 2017. Throughout 2018, the company suffered large losses across the board. They completed an inventory liquidation in August of 2019, and the company claims that they have seen some encouraging signs that they will pull through with productivity and with their marketing strategies. However, there’s no way to really be sure so we’ll have to await an update.
Next, a major burger corporation is really facing the heat and might not be around much longer…
BKH Acquisition Corp.
BKH Acquisition Corp. operates over 100 Burger Kings in Puerto Rico through its affiliate Caribbean Restaurants. In 2017, they were included in a list on the Distressed Company Alert. BKH Acquisition Corp was given a “low rating” in the report. These restaurants are just not performing as well as they are in the United States. So, not to worry, the Burger Kings outside of the Caribbean are still remaining open for now.
S&P Global Ratings lowered its credit rating of the company from CCC+ to B- in 2017, which is given when they consider a business to be vulnerable. The downgrade is due to Puerto Rico’s economic weakness. This Puerto Rican branch of the company is preparing to file bankruptcy.
You might need to look elsewhere for your next new mattress. While at one point the company was known to be doing over $3 billion in sales and had over 9,500 employees, Mattress Firm filed for Chapter 11 bankruptcy in October of 2018. Their financial trouble is said to be due partly to an accounting scandal.
Mattress Firm reported that it planned to sell 700 of its 3,500 stores and 200 of them were supposed to close within days of the announcement. They want to get out of unwanted leases and restructure its business. The company has about $3.2 billion of debt and they admitted to operating too many stores when they knew it wasn’t necessary. While they want to restructure their debt and regain the confidence that their investors have in them, we’ll see where this company ends up.
The company that started in Los Angeles owns Fallas, Conway and Anna’s Linens. Chapter 11 bankruptcy is what they filed for in August 2018, planning to close 74 of its more than 340 stores in the U.S. and Puerto Rico. At one point this company had locations in twenty-two states and Puerto Rico.
National Stores has had a number of brands over the years, likely taking on too much debt. Locations that are open today are in open-air or stand-alone shopping centers only.
As of 2018, the company planned to begin running store closing sales at all of their remaining locations. The announced that they were going to start closing down Fallas and Factory 2-U stores across 12 different states and in Puerto Rico.
Based in San Francisco, the department store operator also sells Gump’s Corp and Gump’s By Mail. When it couldn’t find a buyer, it filed for Chapter 11 bankruptcy in August 2018. In a press release, the company said an “overwhelmingly difficult retail environment” has made it problematic for the business to function. Customers all over the U.S. are not happy with these store closings, and said they will miss the special, elegant products from around the world.
Gump’s By Mail was an effort to sell goods online, and it’s still searching for a buyer. Until the right buyer comes along, Gump’s Holdings will keep going. Gump’s already brought in liquidators to take care of its merchandise and to repay creditors.
Brookstone is another store who filed in August 2018 and is going to shut down 101 locations in the U.S. the company is known for selling tech products and home items, such as massage chairs, gadgets, and pillows. Brookstone is also looking for a buyer for its airport locations, e-commerce businesses as well as wholesale operations. Apparently, landlords haven’t seen this so many empty spaces in malls since 2012.
As of the beginning of 2019, the company has emerged from bankruptcy. While they won’t have as many locations, they will still be around via e-commerce, as well as in about 30 airport locations. It is said that this will help keep about 300 jobs across the board. The company is currently still looking for a buyer.
Shoe Company Rockport Group has retailers in more than 60 countries selling their products. It filed for bankruptcy in 2018, however, joining fellow shoemakers Payless and Nine West. They then sold to private-equity group Charlesbank Capital Partners.
Charlesbank Capital Partners also has stakes in other businesses such as the Princeton Review, Shoppers Drug Mart and Papa Murphy’s Take ‘N’ Bake Pizza – all very different companies.
Rockport was known for inventing the first walking show, and marketing them in a way that shows walking as a form of exercise and a healthy alternative to running. The company also had a large walk across the country back in 1984, which helped make them known for their marketing. They went as far as to invest in the biomechanics of walking when designing their shoes.
The Walking Company
Looks like shoe stores are taking a major hit as people turn to online sales. The Walking Company, which also makes comfy walking shoes, filed for Chapter 11 bankruptcy in March of 2018. But it’s not the first time The Walking Company has filed for bankruptcy. A decade before, the company also filed Chapter 11.
Luckily for them, in April 2010, the company emerged from bankruptcy with 207 stores still around. This time they got lucky again, and emerged from bankruptcy in June 2019. The company received over $10 million in new equity, but had to close 23 out of their 208 locations. So, it looks like they’re sticking around for now. Hopefully this company won’t have to file for bankruptcy a third time.
Kiko USA is a cosmetic store and affiliate of the bigger company Kiko Milano. It filed for Chapter 11 bankruptcy in January of 2018. Their plan to overcome financial troubles includes closing almost all stores in the U.S. At the time, Kiko operated about 1,000 stores across 21 countries. Kiko has about 30 stored in the U.S. within shopping malls.
Although they’re not doing well in America, their international business is doing well enough. This is even with some of the UK locations being closed down. Kiko USA has tried to negotiate with landlords in malls to lower rent and terminate leases. They also claim that they will be focusing more on e-commerce and making sure to invest in the customer experience.
A’gaci, the women’s apparel retailer, filed for Chapter 11 bankruptcy in 2018. It was trying to negotiate real estate deals on 49 out of its 76 stores. Most costs were related to leases being too high. A’gaci reported that it would keep 55 of its stores as well as 1,500 of its employees, having stayed afloat. The company, based in Texas, entered in a commitment letter for up to $12 million with an investor in June.
After emerging from bankruptcy in 2018, 2019 has brought around the same kind of issue. The company recently filed for Chapter 11 again, stating that they didn’t have the luck with e-commerce that they thought they would have. They have already shut down their e-commerce business, and they are preparing to close down all of its retail locations.
The Italian restaurant chain based in Massachusetts filed for Chapter 11 bankruptcy in 2018. When they discussed this, they made a decision to immediately shut down fifteen locations of this restaurant. At the time, there were 59 locations open in 10 states. Bertucci’s was then sold to Florida-based Earl Enterprises for $20 million.
Earl Enterprises also owns Planet Hollywood, Earl of Sandwich and Buca di Beppo. Biz Journals reported that $13 million in debt, $4 million in credit and $3 million in cash were included in the deal. While the company was purchased, the buyers claimed that they saw their vision, and wanted to continue to rebuild the foundation that was already laid. A lot of these locations don’t exist anymore, so you can guess how this ended.
LifeWay Christian Store
The store was originally founded in the late 1800s as LifeWay Christian Resources, and then it became LifeWay Christian Store. It’s one of America’s largest suppliers of religious products and Christian literature. LifeWay’s competitor, Family Christian Resources, had filed for bankruptcy and shut down all 240 of their locations the year before. LifeWay Christian Store is just following in their footsteps.
But as they began to downsize and automate to evolve with online platforms, where they encountered booming inventory prices followed by sharp drops in revenue. By 2017, it was clear that Lifeway was in peril. The last shoe dropped in 2019 when they announced that every last store location would be shutting down permanently. It looks like another instance where e-commerce sales just took over their market.
Bath & Body Works
Bath & Body Works skyrocketed to market kind within a decade of its founding. The company not only escape the “retail apocalypse” of the ‘10s but actually flourished. As of 2019, the company posted a healthy 3% growth, but the company recently announced that 24 store locations will be closing permanently by 2020.
Part of their success over the years comes from their endlessly innovative brand design. Like Starbucks limited-time seasonal drinks, Bath & Body Works has seasonal fragrances. While they are shutting down 24 stores, they will be adding 46 new stores as well as renovating 175 current locations. As of May 2019, the company has already shut down three stores and opened 14 new locations. After all of the closings and openings of locations, there will be 1,641 Bath & Body Works across the U.S.
CVS’ strategy has definitely evolved over the years. Though CVS, and its Pharmacy brand, has managed to adapt to consumers’ online delivery needs, the company still faces bankruptcy given that there are nearly 10,000 stores nationwide. This year, CVS plans to shut down at least 46 underperforming stores by 2020, including its famous Springfield, Missouri location (known as the “largest CVS in the world”).
The move will cost CVS more than $130 million. CVS also has the option of the drive-through pharmacy. This gives them a higher chance of staying open since customers don’t even need to leave the car. At least until they start delivering prescriptions to the door. Even more recently, CVS put out a statement that they will be closing another 22 underperforming retail locations in the year 2020.
Other than the 230 store closures by 2020, The Gap is massively restructuring and rebranding in an effort to stay ahead of the competition. They also want to close down over half of their locations throughout Canada over the next two years. The biggest change is the plan to divide The Gap from its Old Navy brand, and make it into its own separate company.
With more than 2,300 locations in America, CEO Art Peck predicts that 50% of all The Gap’s locations could be closing in the upcoming years. So, while The Gap isn’t disappearing, customers will notice a major difference as early as 2020. It seems like this company is going to go with getting more into the e-commerce world soon.
Second to The Home Depot, Lowe’s is now the number two most profitable home improvement chain in the country. Founded a century ago, the company skyrocketed in the late ‘70s before going public on the NYSE. There are more than 2,000 mega-stores around the world. Ahead of 2020, Lowe’s plan is to close 51 store locations across North America. In addition to layoffs from these store closures, Lowe’s will eliminate several thousand additional jobs from the other locations to cut costs and boost earnings ahead of 2020.
The company claimed that they will be outsourcing a lot of the jobs across the board to give everyone more sales time on the floor with the customers. However, after several thousand layoffs, you can see this was not the case. I guess we will have to wait and see if Lowe’s can compete with Home Depot.
A hallmark of just about every mall in America, Macy’s has announced 9 new store closures by 2020. So to the Macy’s customers: chances are your local store is staying put. At least for now. The latest closures will include the Charleston (South Carolina), Redmond (Washington) and McLean (Virginia) locations. As the leases end, you will notice these locations shutting down one by one.
Still, Macy’s decided to close nearly 100 locations nationwide over the last few years. The company has been regularly facing store closures since 2015. And unfortunately, the store’s problems are only growing. This really makes you think, do any of these retail companies which are suffering in the mall have any chance of surviving this “retail apocalypse”?
Five years ago, Charming Charlie was one of America’s most promising retail chains. Founded in 2004, the women’s clothing, jewelry and accessory store managed to expand to 400 locations, make a presence in the Middle East, and the CEO was even named Entrepreneur of the Year by Ernst & Young.
But their success was followed by economic disaster when they failed to migrate successfully to e-commerce. By 2017, Charming Charlie declared bankruptcy. Its remaining 261 store locations throughout 38 states will all be closed by 2020. In the end the company said that they faced “unsustainable operating expenses, including onerous leases”, and couldn’t go on battling the “retail apocalypse”.
This next company on the list probably reminds you of the products ‘As Seen on TV’…
Bed Bath & Beyond
Bed Bath & Beyond will be closing about 40 stores (less than 4% of its total stores worldwide), but many market insiders predict that this might just be the beginning. The company is experiencing trouble coming back from the downfall, and it seems like they are heading to bankruptcy. Sales plummeted 6.6% in Q2 of 2019, and stock prices have falling hard since 2014.
According to CNN Business, Bed Bath & Beyond may also be losing customers due to their prices alone. Products are sometimes up to 10% more expensive than those on Amazon. Even more recently, the company announced that it is actually closing another 20 locations, bringing it to 60 retail locations total being shut down. The company stated that they understand they have to make a fundamental change in order to keep this iconic company afloat.
Barneys New York
Barney’s New York is considered one of the most iconic brands in Manhattan, but it announced bankruptcy in August of 2019. They are also going to permanently shut down two-thirds of its stores nationwide, 15 out of a total of 22 Barney’s retail locations. They are going to be keeping their New York location, as this is their leading location.
This actually isn’t the first time Barneys looked down the barrel of bankruptcy. It filed Chapter 11 in 1996. At the time, Barneys was never expected to rebuild itself, but they pulled through with clever marketing stunts.
This next one is the complete opposite of Barney’s, and you probably remember it well for being a cheaper option when it comes to clothing…
Things only get worse and worse for Kmart. Once a serious competitor to Walmart and Target, Kmart’s sales started sinking in the late ‘90s. The company declared bankruptcy in 2002 and had to fire more than 30,000 employees. But it survived by merging with Sears in 2005.
But e-commerce proved to be fatal for Kmart. By 2010, the store shut down dozens of locations, and finally filed Chapter 11, again, in 2018. They emerged from their previous bankruptcy with 425 stores left, but more recently announced that they will be closing five more Kmart locations. By 2020, the company will close another 100 locations for good.
While there will be a lot of layoffs, Sears Holdings claim that they will be giving the same severance to employees let go from Kmart.
The retail giant from Green Bay will officially go as of 2020. After almost six decades of business across the country, the company will be closing every last one of its 363 store locations. Shopko Express, Shopko Hometown, and Payless ShoeSource will all get the ax very soon. Few predicted this fate for Shopko since the company was once seen as one of the steadiest retail giants in America.
Shopko was founded back in 1962 by James Ruben. He opened the first retail location in April of 1962. By the year 2000, the company had gorwn and their shares hit a record of $3.57. In 2001, the company closed down 23 stores which ended up cutting 2,500 jobs. In 2005, things started changing and more locations were opened up. As of June 23rd, 2019, the company shut down every last one of their locations.
The popular Party City has been regularly closing about a dozen or more stores every year due to its seasonal, holiday-based strategy. But they recently announced that at least 45 U.S. locations – roughly 5% of its overall footprint – will be closing.
Most of these locations are in California, Illinois, Indiana, Connecticut, New Hampshire, and Washington State. Reportedly, part of the company’s ability to profit was due to a cheaper source of helium after a worldwide helium shortage. While the company is closing down stores, Party City also announced that they are also selling their 65 stores in Canada to the Canadian Tire Corporation.
Since the announcement that 45 stores would be closed, the company announced the closing of another 10 locations.
One of the biggest casualties of the retail apocalypse is the department store Sears, and they announced even more store closings for 2020. As many as 100 locations are closing this year, along with Sears’ Chicago headquarters. That leaves under 200 Sears stores that remain open across the country.
Sears was founded in the late 1800s, becoming the largest retailer in the U.S. over the next century. But by 2010, the company began losing money, prompting them to liquidate their store locations. Sears finally filed Chapter 11 in 2018, and locations have been slowly closing since. The company is said to have emerged from Bankruptcy in February, but still announced a new round of store closings towards the end of 2019.
2019 will be the last year of business for the women’s clothing chain. With a fleet of 650 stores nationwide, Dressbarn announced that every last one of their locations is shutting down for business by 2020.
In early 2019, the company’s CEO put out a statement, saying “It has been our pleasure to serve you, making it all the more difficult to let you know that the decision has been made to begin winding down the Dressbarn business.” At this point, 100 Dressbarn stores have already started liquidating, but the company will keep conducting business (and even honor gift cards) in the remaining locations, up until they all close their doors.
This next company is a popular cheap option for those who are looking to shop on a budget, or should I say it was…
Family Dollar was founded in 1959 and grew throughout the ‘60s and ‘70s. This company is actually owed by Dollar Tree Inc., along with other dollar budget stores. The discount dollar-store started out in North Carolina. It was bought by Dollar Tree and had over 8,000 locations in 46 states.
Carl Icahn, an activist investor, sold the company to Dollar Tree for $8.5 billion. He got 9.4% of that handout, making him wealthier, of course. But the result is that many Family Dollar locations will be closing before 2020. More recently it was said that they are closing almost 400 Family Dollar locations throughout the U.S. This just adds to the thousands of brick-and-mortar stores which have been shut down throughout 2019.
Luxury department chain Nordstrom has a revenue of $16 billion per year. Founded in 1901 and originally called Wallin & Nordstrom, it started off as a shoe retailer. It eventually became a department store over the years. Nordstrom announced massive closures by 2020 in the US. The brand recently expanded into Canada and Puerto Rico, opening stores back in 2014.
The company’s co-president said, “If you want to be known as a top retailer in North America, you pretty much have to be in New York.” He is banking on this, and the New York location was recently opened up. This store is a huge investment right now while everyone else is going through the retail apocalypse, but we’ll have to wait and see what happens in this situation.
Victoria’s Secret was founded by Roy and Gaye Raymond in 1977. They’re credited with bringing hip and fashionable lingerie into the mainstream. The company opened its subsidiary Victoria’s Secret Pink, which also holds apparel and sleepwear. Pink ended up closing first when Victoria’s Secret decided to focus solely on lingerie.
In 2019, Victoria’s Secret actually became the largest retailer of lingerie in the country. But to keep revenues up and compete with the demands of e-commerce, the company has to close more than 50 store locations in 2020. Victoria’s Secret is a popular brand, and is also known worldwide. Hopefully the company’s popularity, along with their decision to shut down Pink and focus solely on their main Victoria’s Secret line, will help save it in the new world of e-commerce.