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For some, the pandemic was a chance to open a new chapter. But for many businesses, the swift and stark economic shutdown led straight to Chapter 11.
“We are seeing an acceleration in bankruptcies that is unprecedented,” James Hammond, CEO of New Generation Research, which runs BankruptcyData, previously told Fortune.
For 2020, he says, “I’m pretty confident we will see more bankruptcies than in any businessperson’s lifetime.” Ranked by assets alone, says Hammond, the magnitude of bankruptcies this year has already surpassed that of 2008.
Below is a running list of companies that have filed for bankruptcy during the pandemic. We’ll add to this list as more Chapter 11 filings are announced.
On October 7th the fast casual chain—which has been around since 1972—announced it had filed a voluntary petition for bankruptcy under Chapter 11 of the bankruptcy code. A company press release said that all locations would stay open, and gift cards would remain valid. This announcement does not mean ‘Goodbye, Ruby Tuesday’ but ‘Hello, to a stronger Ruby Tuesday’ the release read.
Marking it’s second tour through Chapter 11, Sizzler filed for bankruptcy on September 21st. In a statement, Sizzler said that “The filing is a direct result of the financial impact the COVID-19 pandemic has had on the casual dining sector, particularly long-term indoor dining closures and landlords’ refusal to provide necessary rent abatement.” Sizzler was originally founded in 1958 by Del and Helen Johnson as the “Sizzler Family Steakhouse” in Culver City, CA. The idea was to bring a fancy steak dinner to the masses at an affordable price (which was, back then, $0.99).
The off-price retailer never thrived like peers TJX Cos and Ross Stores have, and Stein Mart filed for Chapter 11 protection in August, suggesting it did not have the money to do anything but liquidate entirely.
Richard Branson’s Virgin Atlantic—which is 49% owned by Delta—filed for Chapter 15 protection in New York on August 4th. Chapter 15 is a slightly different form of bankruptcy protection designed for companies that operate in multiple countries. Though the airline had previously tried to obtain a British government bailout, as well as put together a private rescue package, those efforts were not enough to save the company from bankruptcy.
Lord & Taylor
Though the storied department store traced its roots back to 1826 when its founders launched a dry good store on New York’s Lower East Side, it could not survive the financial strain of COVID. The chain—and its owner, clothing rental startup LeTote—both filed for bankruptcy protection on August 2.
The parent company of the Men’s Warehouse and Jos. A. Bank chains filed for Chapter 11 on August 2. As Fortune reported: “The retailer had been facing big challenges before the COVID-19 pandemic, with men increasingly opting for more casual clothing at work and the rising popularity of newer brands and services like Suit Supply. Store closings during lockdowns and millions of men not needing new suits because they’re working from home for now pushed Tailored over the edge. In its most recent quarter, sales fell 60.4% to $287 million.”
On July 10, the U.S. subsidiary of Japanese retailer Muji, operated by Ryohin Keikaku Co., announced it would file for Chapter 11 bankruptcy protection. In a statement, the company said it will remain open for business on its website and currently operating retail locations as it begins “constructive discussions with its lenders and other stakeholders regarding the terms of a financial restructuring plan.”
Sur La Table
On July 9, the Seattle company Sur La Table announced that it had filed for bankruptcy and had a buyout offer from Fortress Investment Group LLC. The chain said it planned to sell 70 stores to Fortress, close another 51, and keep operating cooking classes and its web business.
When the world is working from home wearing athleisure, it’s no time to be running an upscale prepster emporium. The storied purveyor of blue blazers and tasteful cardigans—in business since 1818—filed for bankruptcy protection in mid July.
The largest Chapter 11 bankruptcy so far has been that of car-rental company Hertz. Unable to hold on after the travel industry effectively hit the brakes, the company is now selling off much of its fleet in a bid to meet demands from creditors.
On June 28, the huge energy company based in Oklahoma City filed for Chapter 11, a victim of the staggering reduction in demand amidst the global shutdown. The company reported assets and liabilities in the range of $10 billion and $50 billion and more than 100,000 creditors.
NPC International Inc.
The largest franchisee of Pizza Hut restaurants declared bankruptcy on July 1. NPC opened its first Pizza Hut restaurant in 1962 and operates more than 1,225 Pizza Hut and more than 385 Wendy’s stores across the U.S.
Le Pain Quotidien, U.S. arm
Mon dieu! Despite legions of loyal fans who loved the chain’s bread and pricey salads, a prolonged shutdown took a great toll on the company affectionally referred to as “Le Pain Q.” According to Bloomberg, the chain’s sales were already slipping pre-pandemic, with the U.S. arm reporting a nearly $17 million loss on $153 million in sales last year: “The Chapter 11 petition allows Le Pain Quotidien to rework its debts and carry out a sale to Aurify Brands LLC, which requires court approval. Without the sale, the company would’ve had to liquidate its 98 U.S. stores, proposed Chief Restructuring Officer Steven Fleming said in a court declaration.”
The supplement chain filed for bankruptcy on June 23. As Fortune‘s Phil Wahba wrote, GNC was slammed by yearslong sales declines that made it impossible to meet enormous debt obligations coming due this year.” Indeed, “GNC’s case is the classic tale of a brick-and-mortar retailer getting its e-commerce business going too late. Online sales rose 25% last quarter but were too small of a business to make up for the huge declines in-store.” Oddly, traders still managed to have a field day dodging in and out of shares of the bankrupt company.
On May 7, as Fortune wrote, “the storied Dallas-based luxe purveyor, which also owns New York’s Bergdorf Goodman emporium, filed for Chapter 11 bankruptcy protection in a pre-packaged arrangement with creditors that will significantly lower its debt load. The arrangement should give it more breathing room to weather the global pandemic and rebuild its business.”
COVID proved a knockout blow to the chain that was once rivaled only by Sears in terms of size and importance in U.S. retailing. According to Fortune‘s Phil Wahba: “While the company has been struggling for years—net sales in 2019 were $10.7 billion, down from $19.9 billion in 2007—and has failed to reinvent itself enough to keep shoppers despite many turnaround attempts in the last decade, chief executive Jill Soltau suggested the COVID-19 outbreak pushed it over the edge.” In addition to the mid-May filing, Penney said in a news release that it would explore a number of options including selling the company.
Though the beloved purveyor of preppy gear started the year off on a high note with a new CEO and talk of spinning off the well-regarded Madewell brand, it hit a wall as the pandemic descended. As Fortune‘s Phil Wahba wrote, “the mass store closings that the pandemic imposed on mall-based chains like J.Crew and Madewell pushed the highly indebted private-equity owned company over the edge financially.” The company’s May Chapter 11 filing, “will remove the debt albatross from J.Crew Group’s neck by turning it into equity, and give the troubled but still beloved company something it really needs: a clean slate to reinvent itself after years of turmoil.”
What a difference a year makes. Last April, CEC, the parent company of Chuck E. Cheese, was prepping for an IPO. Instead, at the end of June, they entered bankruptcy protection. At the time, the company did not announce plans to close any of the 612 Chuck E. Cheese locations or 122 Peter Piper Pizza restaurants and said that half of its locations had been reopened for dine-in, delivery, carry-out, or parties during certain hours.