2020 was indeed a year of hardships for us all, but former big players in retail were hit harder than most. Let's take a look at the retail companies that didn't make the cut last year.
One of the staple stores in any mall in America is J.C. Penney. In business for over a century, this retail giant has given new meaning to "the bigger they are, the harder they fall." With a measly $5 billion in assets and double the liabilities, Penney has struggled to maintain its place in retail.
Malls are deteriorating institutions, and J.C. Penney is one of the casualties of the shift in consumer spending to online retailers and local businesses. The coronavirus pandemic only made matters worse as physical locations struggled to sell items.
As a result, Penney filed for Chapter 11 bankruptcy. They shut down more than 150 stores, with more on the chopping block. While their financial situation is far from improved, the new owners, Simon Property Group and Brookfield Asset Management, could help J.C. Penney keep its head above water. New ownership could also save thousands of jobs.
J.C. Penney will never return to its former glory, but hopefully, Chapter 11 and new ownership will help them stay afloat in a competitive retail market.
Pier 1 Imports
Pier 1 Imports has had a challenging year. Despite filing for Chapter 11 in February 2020, Pier 1 has had no choice but to close hundreds of stores and liquidate millions of home goods in an effort to stay afloat.
On the precipice of going completely out of business, REV acquired the name and relaunched the Pier 1 Imports website in an effort to save the brand and transition it to an exclusively online store. It's important to note that REV has acquired several memorable brands like Dressbarn and Modell's Sporting Goods over the years and continues to seek out big names.
J.Crew, the face of all things preppy and sporty-chic, filed for Chapter 11 in May 2020. J.Crew has been the brand for upper-middle-class moms, girlbosses, and preppy country club socialites, but its niche audience wasn't enough to save the company from filing for bankruptcy.
After struggling with debt and sales challenges for years, the company struggled to stay solvent and relevant among its once-loyal customer base. Their efforts to push Madewell, a brand under the J.Crew umbrella, into an IPO failed when creditors pushed back.
The lesson here is that brands who fail to listen to their loyal customers and mismanage their stores could find themselves backed into a corner. J.Crew lost customers, broke the trust of their creditors, and failed to pivot quickly enough to save face.
Company leadership is optimistic about the future and hopes to find stable footing with the help of their bankruptcy settlement.
GNC, a healthy supplement/food/lifestyle brand, couldn't recover from losses and the pandemic. While it may seem odd that a health store would do poorly during a health crisis, the products GNC sells are targeted toward fitness more than daily nutrition and exercise.
Rows and rows of protein powders, pre-workout, vitamins of all kinds, mixes, and tonics can be found at any GNC store, but in a sea of competitors, including Amazon, GNC couldn't keep up. Finally, in September 2020, a bankruptcy judge agreed to the sale of GNC to Harbin Pharmaceutical.
The company seems hesitantly hopeful about the support their new owners can bring, but it's still a tough market out there for health stores.
There are many more retail giants whose struggles were exacerbated by the pandemic. The shift from in-person shopping to online retail has left many stores empty with no choice but to pivot to a virtual store or file for bankruptcy.
Overall, the lesson here is that even large-scale, big-name retailers aren't immune from financial struggles, and bankruptcy is often a way to buy time or reorganize and start over.