The COVID-19 pandemic has sent e-commerce sales skyrocketing while most brick-and-mortar stores were forced to suspend their working. This has fueled the already growing rate of the 'Retail Apocalypse' and as a result, has sent many company sales down the trend. Around 100,000 small businesses in the United States of America have permanently shut down.
Studying the names of some such companies which were forced to liquidate, the names J. Crew, J.C. Penney and Neiman Marcus are common examples. These large chain enterprises were forced into bankruptcy. Some other examples are Centric Brands and Stage Stores.
1. J. Crew Group
This company filed for bankruptcy on 4th May 2020 after years of accumulation of debt and fueled by the low returns brought by the pandemic. They are contemplating permanent store closings.
2. Neiman Marcus
This luxury department store chain filed for bankruptcy on 7th May 2020 mainly due to debt but also due to the sudden demand low. They are considering closing stores on a case-by-case basis.
3. J.C. Penney
The retailer filed for bankruptcy on 15th May 2020 due to years of low return and because their attempt at a turnaround got rendered useless due to the pandemic. They had attempted to improve their in-store experience and apparel in 2020, and the strategy almost worked but due to the pandemic, its brick-and-mortar sales were reduced to almost negligible. The bankruptcy of this company threatens 85,000 jobs possessed by its employees.
4. Stage Stores
This chain has over 700 departmental stores in mid-sized and rural companies and is contemplating permanent shut down or at least, long term suspension in the case of low customers.
A trivial way through which all of these bankruptcies could have possibly been avoided would be by noticing the shift in consumer demands, spending and patterns. Hence, E-commerce is possibly one of the only ways to avoid facing this problem
Thus, while large online retail companies such as Amazon and Walmart peak with profits, formerly large, brick-and-mortar companies drown in bankruptcy and liquidity of assets.
Written by Urvi Agarwal
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