| COVID-19 did not create the so-called retail apocalypse. More than 9,300 U.S. stores closed in 2019, and over 5,800 did the year before that, according to tracking by Coresight Research. A timeline by business analytics firm CB Insights dates the apocalypse to at least 2015.
But the pandemic has been its most swiftly destructive horseman. Following years that saw major retailers swapping hands in debt-bingeing buyouts while consumers shifted from shopping malls to shopping online, the mass shutdown of 2020 pushed some of America’s most iconic brands to the brink.
The pandemic brought a parade of headline-making Chapter 11 filings, with historic department stores and apparel purveyors at the front. And while bankruptcy doesn’t necessarily mean out of business, the financial fallout from COVID-19 did kill a few storied chains, shrink others and usher several into a new, online-only form. Here are some of the biggest-name bankruptcies to date and what their reorganizations wrought.
Ascena Retail (Lane Bryant, Ann Taylor)
Founded: 1962 (as DressBarn)
Filed for bankruptcy: July 23, 2020
Facing some $1 billion in debt, the company behind some of the best-known names in women’s fashion sold all its brands and shed most of its approximately 2,800 stores as part of a Chapter 11 restructuring that won court approval in March.
Ascena’s biggest names — plus-size bellwether Lane Bryant and premium brands Ann Taylor, Loft and Lou & Grey — were sold in December to an affiliate of private equity firm Sycamore Partners, which owns Belk (see below) and several other well-known chains. Two other Ascena brands — tween fashion chain Justice and plus-size line Catherines — were sold earlier in 2020 and closed all their stores (Catherines continues to operate online).
The original bankruptcy filing came about seven months after Ascena liquidated the last stores in its original line, DressBarn, which now operates online only under new ownership.
Filed for bankruptcy: Feb. 23, 2021
The venerable department store that brands itself the home of “Modern. Southern. Style.” spent only a day in Chapter 11, emerging from bankruptcy Feb. 24 with court approval of a reorganization plan that provides $225 million in new capital and eliminates $450 million in debt.
Belk’s chief financial officer said in a court declaration that the company faced liquidation without fast action on the restructuring blueprint worked out between its majority owner, Sycamore Partners, and key lenders. The deal kept open all 291 Belk stores in 16 Southern and Southeastern states, with no job losses.
Founded by brothers William Henry and John Belk in Monroe, North Carolina, Belk grew into the nation’s largest privately owned department store chain and stayed in the family until Sycamore’s 2015 leveraged buyout, which left the company heavily indebted. The pandemic further walloped Belk’s finances, prompting restructuring talks to start in late 2020, according to court papers.
Filed for bankruptcy: July 8, 2020
The brand that for generations defined the American way of dressing for success — especially the American male executive way — faced strong headwinds as people increasingly dressed down for the office and then, with the pandemic, stopped going entirely. When it entered Chapter 11, the country’s oldest ready-to-wear clothing retailer had already opted not to reopen 20 percent of its roughly 250 U.S. stores that went dormant in March, and it’s expected to close its three U.S. factories.
In a post on its Facebook page, Brooks Brothers said bankruptcy proceedings would help it facilitate an ongoing sale process while managing “what has been an incredibly challenging period for all industries, especially retail.” A joint venture of mall developer Simon Property Group and Authentic Brands Group, a brand-management firm, won court approval Aug. 17 to buy Brooks Brothers for $325 million. The new owners pledged to keep at least 125 Brooks Brothers stores open.
The joint venture, called the Sparc Group, has also purchased bankrupt jeans retailer Lucky Brand.
CEC Entertainment (Chuck E. Cheese)
Filed for bankruptcy: June 25, 2020
The 600-plus restaurant chain — whose pizza, arcade games and (until it was retired in 2019) animatronic band fueled countless raucous kids’ parties — was especially hard-hit by a pandemic that halted dining out and large gatherings virtually overnight. The company saw revenue plummet by 90 percent, increasing pressure to deal with nearly $1 billion in long-term debt.
CEC, which also owns the similarly themed Peter Piper Pizza chain, completed its restructuring at the end of 2020 with new ownership and about $705 million less in debt. The company and its franchisees operate 559 Chuck E. Cheese and 122 Peter Piper Pizza locations, most of which have reopened since the wave of coronavirus closures in the spring of 2020. About four dozen locations shuttered during the pandemic were closed permanently.