Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business News

J. Crew has filed for bankruptcy, other retailers are next

(BUSINESS NEWS) Many brick and mortar retail stores were already losing to online shopping but COVID-19 may be the final nail as J.Crew files bankruptcy, other may follow.

J. Crew bankruptcy

On Monday, J.Crew filed for bankruptcy, the first major retail victim of the coronavirus crisis. Brick-and-mortar retail stores have struggled since the advent of online shopping, then COVID-19 came along. Other stores may also be on the chopping block like JCPenney, Sears, and Neiman Marcus. The once mighty retail chains have withstood the changing 20th century, including wars, economic depression and recession. Now their end may be hastened by a pandemic.

In lieu of the many state-wide lockdowns, retail stores have closed across the country. Hundreds of thousands of employees have been furloughed amidst losing sales. Shoppers are spending money on essential goods like groceries rather than the latest fashion trends. While Macy’s has announced plans to reopen in the coming months while following social-distancing guidelines, it goes to show how the in-person shopping experience will change as stores may need to restructure their operations. That is if shoppers return at all.

J.Crew’s bankruptcy is an omen for more retail casualties to come. In a report by CNN, Mark Cohen, director of retail studies at the Columbia Business School commented on the situation: “The retailers who were wandering around aimlessly pre-pandemic are going to be substantially less likely to muddle through than they were before.”

Sears already filed for bankruptcy in 2018 and has been on shaky ground ever since. Meanwhile even luxury retail is feeling the pressure. Neiman Marcus has a $4.3 billion debt and is considering the same route according to Bloomberg. JCPenney is also drowning in a $3.7 billion debt and its survival is currently dependent on its liquidity. Drastic restructuring will be needed said Craig Johnson, president of Customer Growth Partners. “This is going to be a three-pointer deep in the corner with time running out,” he told CNN.

Advertisement. Scroll to continue reading.

J.Crew was in hot water before the pandemic broke out. With $1.6 billion in debt, the company had plans to launch a public offering of Madewell, its popular denim brand. COVID-19 is only hastening the end for these floundering companies.

Staff Writer, Allison Yano is an artist and writer based in LA. She holds a BFA in Applied Visual Arts and Minor in Writing from Oregon State University, and an MFA in Fine Art from Pratt Institute. Her waking hours are filled with an insatiable love of storytelling, science, and soy lattes.

2 Comments

2 Comments

  1. Pingback: Macy's is taking drastic steps to not close its doors - The American Genius

  2. Pingback: School supply retailers are also feeling the effects of COVID-19

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business News

(BUSINESS) A Human Resources expert discusses the best (and worst) questions she’s experienced during candidates' interviews - let's learn!

Business News

(BUSINESS) What do you need to think about and explore if you want to apply for a Board of Directors? Here's a quick rundown...

Business News

(BUSINESS NEWS) It's unfortunate that sexual harassment still exists in the modern-day, but we have easier access to resources to curb this behavior.

Business News

(BUSINESS NEWS) Surely after a century we have learned half the population can work just the same as the other half right? "Women don't...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.