The retail sector has is continuing to drag its feet in the overall economic recovery and the new threat of the global Covid19 pandemic is likely to push some companies out of business.
Changes to consumer behavior, online competition, and increasing rents were highlighted as being factors in the cascade of high profile bankruptcies last year. Some of them were filing for a second time.
Changing The Retail Landscape
2019 saw a number of retail giants head for their best bankruptcy attorneys. Not all of them disappeared, some were looking for refinancing and restructuring opportunities, others looking for new owners.
It’s clear that we’re at a watershed moment in history for the retail sector, with brands big and small feeling the effects.
Barney’s New York
One of America’s most recognizable and exclusive clothing stores filed for bankruptcy in August 2019 and immediately put itself up for sale. Huge rent increases and low footfall pushed it to reach an agreement with investment first B. Riley Financial and Authentic Brands Group. The Barney’s brand has now been officially licensed to Saks Fifth Avenue in a deal worth a reported $271 million.
Clothing retailer Charlotte Russe filed for bankruptcy and said that it would be forced to liquidate all 500 of its stores across the US.
However, the brand and associated intellectual property rights were sold to YM Inc, which will see the return of 100 stores along with an overhauled online presence.
One of the world’s biggest retailers of women’s maternity clothing filed for bankruptcy in October 2019.
Marquee Brands made a successful $50 million bid for the intellectual property rights which now sees the Motherhood Maternity and A Peas In The Pod Brands move under their control.
The American arm of denim company Diesel blamed mounting debts, slow sales and high rents for its decision to file for bankruptcy.
Diesel stated that the resulting restructuring of the company will allow Diesel to continue to be an “iconic and profitable brand”. The rest of the Diesel operating company remains unaffected.
Founded in 1984, the once-popular fast-fashion retailer and social influencer favorite, fell victim to the changing habits of younger consumers. The bankruptcy is set to see 178 US stores and 350 international stores close. The brand continues to trade in Europe and parts of South America.
The brand also owned the Janie & Jack and Crazy 8 stores to close all of its 800+ stores. The Gymboree IP was acquired by Gap and The Children’s Place, who will be aiming to keep some of the stores open.
The once iconic big brand, Roberto Cavalli, filed for Chapter 7 bankruptcy and promptly shuttered all of its stores. The brand operated in the US under the company Art Fashion Corp.
Filing for Chapter 11 bankruptcy back in January 2019, the Wisconsin based retailer failed in it’s search to find buyers, resulting in the closure of all 363 stores.