Retailers had already been struggling, and now they’re bearing the brunt of coronavirus’ impression. But a big fitness center model and a significant automobile rental firm have additionally filed for bankruptcy just lately.
Still, many different manufacturers that have filed for bankruptcy with the intention of staying in enterprise did not survive. Here are some US-based companies that filed in May:
Filing for Chapter 11 bankruptcy safety will assist it “emerge stronger and ready to grow,” the assertion continued.
The 55-year-old firm intends to exit bankruptcy by August and mentioned it’s “absolutely not going anywhere.” Gold’s did shutter 30 places in April, nevertheless it would not intend to completely shut any extra gyms.
The firm has been in enterprise since 1918, when it arrange store with a dozen Ford Model Ts. Hertz has survived the Great Depression, World War II’s near-total halt of US auto manufacturing and quite a few oil value shocks.
By declaring bankruptcy, the rental automobile firm says it intends to remain in enterprise whereas restructuring its money owed so it could actually emerge financially more healthy.
“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 corporate mentioned in a press release, 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 complete of $16.2 million to 340 executives on May 19 as a part of a plan to maintain them in place whereas the corporate makes an attempt to reorganize, in response to a submitting with the Securities and Exchange Commission.
Coronavirus might be the ultimate blow for 118-year-old division retailer stalwart JCPenney. It was already struggling to beat a decade of dangerous selections, government instability and damaging market tendencies.
“Until this pandemic struck, we had made significant progress rebuilding our company,” CEO Jill Soltau in a press release, including that the corporate’s efforts “had already begun to pay off.”
The firm, which owns the preppy J.Crew and Madewell manufacturers, expects to remain in enterprise and emerge from bankruptcy as a worthwhile firm. And Madewell, the fast-growing denim model that had been slated for an IPO, will stay a part of the enterprise.
J.Crew Group was saddled by a heavy debt load since its 2011 buy from personal fairness companies TPG Capital and Leonard Green & Partners in a $three billion deal.
It had grown quickly in the 9 years because the transaction was accomplished, almost doubling the variety of shops. But it has additionally accrued much more debt. It had $50 million of long-term debt on its books in 2010, earlier than the deal was introduced — and as of February of this yr that quantity had ballooned to $1.7 billion.
The firm operates almost 500 shops together with J.Crew’s manufacturing unit retailers.
The firm’s historical past goes again 113 years to its first retailer in Dallas, which continues to be its residence base. The firm additionally operates the Bergdorf Goodman and Last Call chains.
ITS destiny was very probably sealed in 2013 when Ares Management and the Canada Pension Plan Investment Board paid $6 billion in a leveraged buyout, taking the corporate personal.
“The big issue with Neiman is that the [private equity companies] paid too much and layered on too much debt,” Steve Dennis, a retail marketing consultant and former Neiman government, beforehand informed CNN Business.
CEO Steve Becker mentioned the enterprise was thriving earlier than the pandemic. But the ensuing short-term retailer closures and worker 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 mentioned in a press release.
The Dallas-based chain, which filed on May 27, mentioned it would completely shut roughly 230 of its almost 700 US shops.
–CNN Business’ Chris Isidore and Nathaniel Meyersohn contributed to this report.