The Number Of Failed Retailers In The United States This Year Exceeded The Figure Of 2019
American retailers were in a more difficult financial situation than top managers and analysts expected at the beginning of the coronavirus pandemic.
The sector has seen an increase in the number of bankruptcies: the number of retailers who have requested protection under article 11 of the US Bankruptcy Code is currently higher than for the entire past year.
Since the beginning of the year, 24 public and large private retailers in the United States have filed for bankruptcy, according to data BankruptcyData.com. In 2019, 20 retailers declared bankruptcy.
"Overall, the number of retailers declaring bankruptcy in 2020 is likely to exceed forecasts made in the early stages of the pandemic," says David Berliner, a partner at BDO USA LLP, quoted by the Wall Street Journal.
The bankruptcies are related to restrictions imposed by US authorities in March, which resulted in most retailers having to suspend their operations. They include the owner of the Department store chain J. C. Penney Co., luxury retailer Neiman Marcus Group Ltd., and clothing retailer J. Crew Group Inc. All three companies filed for bankruptcy in May.
"Most of the companies that filed for bankruptcy were not retailers selling non-essential goods, so their work was suspended," said the managing partner of SSA & Co. Matthew Katz.
Some retailers that declared bankruptcy this year will continue to do business as normal. Neiman Marcus, Penney, and J.Crew plan to emerge from bankruptcy with the opening of more stores. Others, including the parent company of the women's clothing chain New York & Co., are closing all their stores permanently.
Some retailers are switching to online trading, including selling their e-Commerce business as Pier 1 Imports Inc.