The Companies In Danger of Going Bankrupt In 2019
When it comes to business, companies come and go. Even the greatest of the greats is not immune to eventually closing down, unfortunately. Sometimes the culprit happens to be the failure to adapt to the new trends in the industry, though there are game changers that can put companies out of business as well. Are you prepared to hear about the stores that are due to shut down in 2019? We will mourn some of these retailers – it truly is a dog eat dog world out there!
J. Crew
Former First Lady Michelle Obama is a big fan of J. Crew. Even though someone this big is a supporter, the company has been shutting down stores because of plummeting sales in recent years. Aside from that, the retailer said goodbye to its bridal store, creative director, and CEO. Former CEO Millard “Mickey” Drexler said that the root of its problems is none other than raising prices.
J. Crew
Sears Holdings
Sears Holdings has been bogged down by various issues for a long time now. Sales have steadily declined in 10 years, despite the fact that they tried to do everything to keep things running. The company sold assets, laid off employees, shut down stores, and cut costs. RetailDive claims that these measures have not led to much development. This must be why Sears Holdings applied for Chapter 11 in October 2018 as well as halted operations in 142 stores. Eddie Lampert, the CEO, tried to stay afloat by taking out loans in the hundreds of millions from his own hedge fund, but to no avail.
Sears Holdings
99 Cents Only
99 Cents Only has been suffering from the fact that it has not found a way to beat competitors like Dollar Tree, Walmart, and Dollar General. In December 2017, it claimed it suffered a net loss amounting to $27.1 million. Not only that, but the company also reported a loss of $8.8 million during Q1 and then $33.6 million in Q2. The company was acquired by Ares Management then by Canada Pension Plan before it made its way to a private family. Jack Sinclair ended up replacing CEO Geoffrey Covert as well. Even though things have yet to look up, it is not out of the game just yet.
99 Cents Only
GNC
In 2017, GNC saw a gross revenue decline of 3.4 percent. On top of this, it already had a debt of $1.3 billion. Its chief executive claimed that the company was doing fine in China and e-commerce sales for Q2, although it also experienced a sales and profits decline in the same timeframe. GNC planned to sell 40 percent of the shares to a pharma company in China, who would take over the distribution, sales, promotion, and production over there.
GNC
Fred’s Pharmacy
Fred’s Pharmacy suffered a drop in its gross sales in May 2018. To be specific, it experienced a drop of 4.3 percent! For some reason, it wanted to operate 1,000 stores from 600 stores, although this did not happen. The CFO ended up leaving the company, and a former media exec took over the position. The company was put up for sale afterward. For $40 million, it decided to sell the specialty pharmacy CVS.
Fred’s Pharmacy
Destination Maternity
Destination Maternity is considered to be a giant in the world of maternity apparel with its more than a thousand stores. The CEO left the company last year after the gross sales decreased by over 7 percent. They later asked for the help of Berkeley Research Group, who said the problems arose after breaking it off with Kohl. In 2017, sales dropped by 6.4 percent. There is still hope as it saw a 40 percent increase in its e-commerce business, however.
Destination Maternity
Ascena Retail
Ascena Retail is the retail giant behind brands like Lou & Grey, LOFT, Ann Taylor, and Dress Barn. Sadly, getting a new chief did not do anything for Dress Barn. It was decided that 25 percent of the stores will shut down in an effort to save the brand. Ascena expected $1.7 billion in sales in 2017, although the top-line sales declined. Moody’s, a financial company, later said it “is on a path to developing a strong ‘backbone’ of retail capabilities.”
Ascena Retail
Stein Mart
While the Jackson-based discount store has been having problems, it looks like that era is about to end. Stein Mart managed to increase its digital revenue by 47 percent in 2017, which is good when you consider that it suffered a $23.4 million loss that year. Luckily, the loss dropped by 10 percent. It seems like all is well especially since it was recently granted a $50 million loan.
Stein Mart
JC Penney
While JC Penney is doing better than Sears, it is not doing all that well. It let go of a thousand employees and a distribution center last year. Top-line sales dropped by 0.3 percent on a net income of $116 million in 2017. A big factor in the struggle is its debt of $4.2 billion. Investors are apparently getting impatient with its progress. JC Penney mixed up its executives recently, however. Is it going to work?
JC Penney
Office Depot
Office Depot did not do so well in 2017 since the sales saw a 7 percent decline, which led to $10.2 billion sales. The CEO announced that it was going to start offering services like its subscription program “BizBox”, which has been positive thus far. It also bought an IT firm by the name of CompuCom.
Office Depot
Vitamin Shoppe
Vitamin Shoppe is yet another retailer that is struggling to keep with changing demands. Even though it has gone into e-commerce and began offering a subscription service, it still suffered an 8.5 percent decrease in top-line sales this 2017. It is mostly attributed to the declining popularity of shopping malls and the rise of competition. They are trying to work on it by expanding categories, launching events, and starting delivery services.
Vitamin Shoppe
Neiman Marcus
Neiman Marcus suffered a 5 percent top-line sales decline in 2017. The good thing is that they are employing methods that seem to improve things. However, interest expenses are still a burden. Hudson’s Bay once wanted to acquire it, although the negotiations did not end up happening because the company was worried about the declining sales of the luxury retailer.
Neiman Marcus
Bebe
Bebe sales started to go down after the divorce between its founder and creative director. Aside from Neda Mashouf leaving the company, the decline of mall culture also played a part in the state of things. In 2017, the retail company experienced a loss of $4.6 million in sales. It decided to address the issue by opting out of traditional retail space. It even paid $65 million to shutter physical stores and focus only on e-commerce.
Bebe
Pier 1 Imports
In 2018, research and strategy company Jeffries said 2018 was bound to be a “heavy investment year” for Pier 1 since it was going to handle its “sourcing, merchandising, pricing, marketing, store ops, e-com, and supply chain.” During Q1 last year, it experienced a 9.2 percent decline in sales. Its credit rating also went down thanks to S&P Global analysts. To make matters worse, Trump placed the 10 percent tariff on China goods when they get their products there.
Pier 1
Lands’ End
Land’s End is currently in hot water, although people say it is because of its relationship with Sears. In 2013, the latter headed in a new direction. Although Land’s End sales are going strong, ex-CEO Federica Marchionni made bad choices. One of these had been the brand Canvas. It offered clothing in “designer styles to relaxed looks” but, unfortunately, failed to attract the interest of clients.
Lands’ End
Guitar Center
Guitar Center only had a year to pay its $900 million debt in 2018. The veteran instrument retailer saw a 36 percent decline in its electric guitar sales from 2005 to 2016. Despite everything, the company plans to open more stores. It was lucky enough to get an emergency loan grant, after all.
Guitar Center
Southeastern Grocers
Winn-Dixie is not doing so well because Southeastern Grocers, its operator, applied for bankruptcy to deal with its loans. It ended up closing about 100 stores and paying off $600 million in debt. The company now plans to remodel and rebrand the remaining stores. Its downfall was caused by competition, both physical and online.
Southeastern Grocers
Nine West
Nine West reportedly has debt amounting to $1.5 billion, although it is now trying to negotiate and restructure it. It has filed for Chapter 11 and sold off certain lines like Easy Spirit. At the moment, its plan is to stop focusing on shoes and pay attention to jewelry and clothing as well as other lines like One Jeanswear Group, Ann Klein, and Kasper Grouper as footwear no longer seems to attract clients.
Nine West
David’s Bridal
Nowadays, it seems like brides chose more economical attire and events, which might be why David’s Bridal is not doing so well. It has a loan worth $520 million that is due this 2019 as well as $270 million in 2020. New CEO Scott Key is trying to refinance the debts after suffering from a decline in margins, earnings, and sales. In June 2018, it got a credit rating downgrade from S&P Global.
David’s Bridal
Bon-Ton
Although Bon-Ton has been around for a century, it was not spared from bankruptcy and then liquidation. In October 2018, the department store reopened its e-commerce platform and announced its reopening plans. USA Today claimed, “The reinvented Bon-Ton would be sleeker, more e-commerce focused business.” The company suffered after failing to cope with the entry of Amazon.
Bon-Ton
Tops Market
A common reason for bankruptcy filing is the failure to cope with changing consumer interests. That was what happened with Tops Market. With non-traditional food sellers and competitors on the rise, it ended up filing for Chapter 11. However, it remains open. In fact, the company recently got out of its $80 million annual interest due in 2017.
Tops
Cole Haan
USA Today included Cole Haan in its list of 26 companies at risk in 2018. It was formerly owned by Nike, which helped it be known for its comfy dress shoes. Later bought by Apax Partners, it suffered when it had to compete with its ex-mother company. It still has ways to go before it gains its former glory.
Cole Haan
Charlotte Russe
In February this year, Charlotte Russe filed for bankruptcy. Back then, it only planned to shutter 94 stores. However, the number rose to 500 stores because a liquidator acquired it in the bid. In March 2019, the company announced it was liquidating and shuttering all stores. The culprit is none other than the growing unpopularity of malls.
Charlotte Russe
Claire’s
Are you a woman? If so, there’s a good chance you are fond of this jewelry store. Sadly, the company has ceased IPO, so the bankruptcy filing in March 2018 did not surprise anyone. It hoped to bring down its debt by almost $2 billion. By May 18, it already shut down 130 locations. It is now looking for a buyer.
Claire’s
FullBeauty Brands Holdings Corp
FullBeauty is the parent company of a number of plus-size brands in the market. It also puts the blame on Amazon for its plummeting sales. Its owner, Apax Partners, cited this reason when it got in touch with lenders. In 2017, the company experienced a 30 percent revenue decrease during Q1. FullBeauty has since changed its executive lineup, which will hopefully improve the situation.
FullBeauty
Eddie Bauer
Eddie Bauer has been suffering from debt problems and failure to cope with trends. Golden State Capital, its owner, thought of selling it off in 2017 for these problems. It did not help that S&P Global downgraded its credit ranking in the same year. The company actually went bankrupt in 2009, which was when Golden State Capital saved it. Let’s see if the merger with Pacific Sunwear will happen…
Eddie Bauer
Bluestem Brands
Bluestem Brands earned a spot on the list of at-risk companies released by Business Insider. In 2017, the retailer did not fare well whatsoever in terms of sales. The company’s net sales suffered a 10.9 percent decline, without even accounting for the 5.1 percent decline of exited businesses. Let’s hope it gets better…
Bluestem
PetSmart Inc.
The pet product retailer needed to restructure after incurring a debt worth $8 billion. Luckily, the debts are not due to mature until 2022. Its problem also has to do with the rise of e-commerce as well as declining prices. PetSmart opted to buy an e-commerce site called Chewy for $3.35 billion, which is the highest cost of any e-commerce site at the time.
PetSmart
Payless
In 2017, shoe retailer Payless applied for bankruptcy, closed over 600 stores, and let go of employees. Luckily, they were able to get things sorted out after reorganization. It shuttered plenty of stores, but there are still 3,500. Its CEO said, “We have accomplished our goals of strengthening our balance sheet and restructuring our debt load, positioning Payless to create substantial value for our stakeholders.”
Payless
BKH Acquisition Corp.
BKH Acquisition Corp. operates more than a hundred Burger King locations in Puerto Rico. Sadly, it fell under the Distressed Company Alert and even got a “low rating”. Its credit rating also got downgraded by S&P Global. According to a credit analyst, this was likely due to the bad Puerto Rican economy.
BKH Acquisition Corp.
Mattress Firm
On October 5, 2018, Mattress Firm opted to file for Chapter 11. Its financial hardships have been linked to an accounting scandal as well as “an onerous store footprint.” After announcing the bankruptcy, it hoped to sell 700 of its stores and then shut down 200 more. Currently, it is restructuring the company.
Mattress Firm
National Stores
In August 2018, National Stores filed for Chapter 11. It also announced that it was halting operations in 74 Puerto Rico stores. There have been speculations that it accrued debt after acquiring various brands over the years, which then led to bankruptcy. It has many open-air and stand-alone locations too.
National Stores
Gump’s Holdings
Gump’s Holdings filed for bankruptcy when no buyer expressed interest. During the press release, it said it has been suffering from an “overwhelmingly difficult retail environment” Even though Gump’s By Mail was launched, Amazon proved to be a formidable opponent. The company continues to look for a buyer.
Gump’s
Brookstone
In August 2018, Brookstone decided to file for bankruptcy. The company planned to shutter 101 stores all over the country. Sadly, it is yet another victim of the declining foot traffic in shopping malls. Brookstone also hopes to find a buyer for its airport shops, wholesale operations, and e-commerce biz.
Brookstone
Rockport
Rockport Group applied for bankruptcy in May 2018. It must have been a relief when Charlesbank Capital Partners purchased it in no time. The deal was completed in July 2018. We hope the private-equity company with an interesting portfolio can help Rockport Group return to its former glory.
Rockport
The Walking Company
Is there a connection between footwear companies and bankruptcy? The Walking Company is another shoe business that fell into bankruptcy. In March 2018, it filed for Chapter 11. However, it turns out that it did the same thing 10 years ago! Anyway, things are looking up since it came out of bankruptcy in July.
The Walking Company
Kiko USA
In January 2018, Kiko USA filed for bankruptcy. It is trying to get its finances in order by shuttering its stores all over the country. It has 30 or so stores in the United States, and almost all of them are in shopping malls. At the moment, the company is trying to fix things by talking to landlords and leasers.
Kiko USA
A’gaci
At the start of 2018, A’gaci, a womenswear company, applied for bankruptcy. It was in the middle of negotiations with the landlords of 49 stores. At the press release, it claimed that a huge chunk of expenses was for high leases. During the summer of that year, they managed to come out of bankruptcy and receive approval for a loan worth $12 million.
A’gaci
Toys R Us
Toys R Us filed for Chapter 11 bankruptcy in 2018 and immediately went to liquidate the stores. Its 735 American stores held huge sales in the hopes of shutting down all the stores and saving up on lease as quickly as possible. The company owners stopped the bankruptcy bid so things might still change…
Toys R Us
Bertucci’s
Bertucci’s decided it was time to file for bankruptcy during spring 2018. The restaurant chain shut down 15 locations in April and was purchased by Earl Enterprises. A total of $20 million, the payment was apparently made in $3 million cash, $4 million credit, and $13 million debt. How interesting is that?
Bertucci’s
Gymboree
Gymboree applied for bankruptcy in January 2019. After doing so, the company planned to shutter the operations of all the Gymboree and Crazy 8 shops. However, this did not come through as Children’s Place decided to buy them out. Aside from that, the Gap bought its customer data, website, etc.
Gymboree
Diesel USA
On March 5th, 2019, Diesel USA applied for Chapter 11 thanks to the “general downturn in the brick-and-mortar retail industry”. On top of that, it also blamed low net sales, fraud, theft, and high leases. The company also aimed to relocate to locations “with a smaller footprint” and to reorganize.
Diesel
Imerys Talc America Inc.
Imerys Talc America supplies Johnson & Johnson’s talc powder. In February 2019, the company applied for bankruptcy, which was probably because of the 14,000 claims it was facing. A lot of women claimed its talc powder caused the cancer. It seems like the asbestos in the product caused mesothelioma.
Imerys
Pacific Gas and Electric (PG&E)
Pacific Gas and Electric applied for Chapter 11 on January 20, 2019 after the California wildfires that happened in 2017 and 2018. This electric and gas company still plans to approve employee bonuses worth $235 million, however. Senator Jerry Hill even said, “$235 million would go a long way to support the victims of last year’s wildfires.” The company needs to sort out its priorities, stat.
PG&E
Things Remembered
Things Remembered will never be forgotten no matter what. On February 6, 2019, it filed for Chapter 11 bankruptcy. This retailer is best known for creating personalized keepsakes and gifts. Luckily, it will keep doing that since Enesco, a home décor and gift company, bought it out.
Things Remembered
Innovative Mattress Solutions
Innovative Mattress Solutions applied for bankruptcy on January 14, 2019. However, some confusion arose as a subsidiary had the same name as a different retailer. This was the statement released by Innovative Mattress Solutions to clear things up: “This filing of Chapter 11 bankruptcy has no bearing on the Mattress Warehouse (sleephappens.com) organization or their relationships with their vendors.” The company will likely shutter 142 stores.
Innovative Mattress Solutions
Z Gallerie
Furniture retailer Z Gallerie filed for bankruptcy on March 11, 2019. It was planning to shutter 17 stores but kept looking for a buyer to prevent its liquidation. In the statement, it said the bankruptcy happened because of self-imposed problems. Things would have been better for them if they invested in e-commerce more instead of investing in distribution centers.
Z Gallerie
Beauty Brands
Beauty Brands filed for bankruptcy on January 4, 2019. It seems like the beauty company already sold a number of assets by then. An advertising legend by the name of Bob Bernstein is considered to be its “stalking horse bidder.” This means he will likely win the bid if no one places a better offer soon!
Beauty Brands
Shopko
On January 16, 2019, Shopko applied for Chapter 11. It wanted to close 70 percent of its retail stores from February to May 2019 while it reorganized. Michelle Hansen, the company spokesperson, explained, “Through our conversations with the potential buyers, it has become clear that it is in our best interest to operate with a significantly smaller store footprint.”
Shopko
The Weinstein Company
When the #MeToo movement started, Harvey Weinstein was the main target of the accusations. The company he founded had to file for Chapter 11 in March 2018. In May of the same year, a private-equity company by the name of Lantern Capital Partners acquired it for $310 million and $115 million in debt.
Weinstein