2020 has been a year unlike any other. So far it has been the year of the coronavirus pandemic. No matter where you go, it is the topic of conversation. It has changed the way society operates, kept millions of people inside their homes, killed thousands of people, and put many businesses out of business and filing for bankruptcy. Some industries have been allowed to remain open for business, but retail and the fashion industry has been hit hard. Let’s break down 5 fashion brands who have declared bankruptcy as a result of the coronavirus pandemic:
Neiman Marcus is a Dallas based luxury department store chain that has been around since 1907. They developed a reputation for having high quality merchandise and their company continued to grow for decades. They were trend setters in the department store industry, even starting a weekly fashion show in 1927 that was said to be extremely elegant.
As with all things that go up, Neiman too eventually had to come down. The Neiman Marcus Group filed for bankruptcy on May 7th, 2020 citing high debts and the inability to pay them due to the coronavirus pandemic shutting down all of the 43 retail locations and furloughing 14,000 workers. At the time of filing, Neiman Marcus Group owned approximately $5 billion in debt!
The Neiman Marcus Group has since declared that many of their creditors have shown support in restructuring their debts.
ALDO is a worldwide footwear and accessory retailer based out of Montreal, Quebec. The company was founded 48 years ago in 1972, by Aldo Bensadoun. ALDO saw its greatest success in the 80s and 90s. Through partnerships and becoming “green neutral” they remained relevant globally.
With that said, earlier this month they filed for protection from creditors in both Canada and the United States with intentions to restructure and stabilize their business. The reason behind this seems to be due to global retail markets coming to a halt since the coronavirus outbreak.
Even though these are very tough times for ALDO’s cash flow, they have been able to stay alive and continue to grow for decades so there is a good chance they might make it through.
The New York fashion company John Varvatos is another fashion giant that has been forced to file for bankruptcy due to their boutiques being shut down during the coronavirus stay-at-home orders. The company owed more than $100,000,000 to creditors and has made arrangements with existing investor, Lion Capital. Lion Capital feels confident in the long term viability of the brand and is looking forward to the restructuring.
The California denim company has been in trouble for a while, but coronavirus might have been the final blow. They wanted to wait out the stagnant times of stay-at-home orders, but simply couldn’t afford to. True Religion is currently relying on their online business to generate cash flow.
Formally Popular Merchandise Inc., better known as J.Crew has been selling men and women’s fashion since 1947. They managed to set trends and grow for decades but couldn’t remain afloat during the coronavirus pandemic. This is because of lack of retail shopping and there insanely high amount of liabilities cited to be over 1 billion dollars. After filing bankruptcy, they reached a deal with lenders to convert over one and a half billion dollars into equity.
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