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The global pandemic is taking a toll on retailers. As many Americans sheltered in place, retail sales plunged a record 16.4 percent in April, according to the U.S. Census Bureau. That came on the heels of an 8.7 percent drop in March. And in May, J. Crew became the first big name to file for bankruptcy protection amid the current coronavirus outbreak. Neiman Marcus and J.C. Penney soon followed suit.
Of course, retailers’ troubles started long before COVID-19 concerns began to pile on. Indeed, in 2019, more than 9,500 stores closed, according to Coresight Research. That was 60 percent more than the year before and continues a years-long trend of closures as businesses were rethinking their brick-and-mortar presence and adjusting to the ubiquity of online shopping.
But the pandemic is now really pushing the point home. “The effect of the pandemic is to accelerate the demise of retailers that had lost their way and that people no longer had a reason to [visit],” said Thomas Robertson, marketing professor and former dean of the University of Pennsylvania's Wharton School of Business, in a recent report. “There will be a reconfiguration as we come out of this. I don't know what it's going to look like, but there will be new players — some existing players will get stronger, and I expect acquisitions will occur. There will be a shakeout."
Which brands will make it to the other side of this unprecedented situation? Looking back to see how former big names fell from grace might offer some insight. The following retailers surely had unique struggles, but often their collapses boiled down to overexpansion, too much debt and a failure to keep up with changing trends. See what lessons your favorite retailers of the past can offer to all the businesses currently facing an uncertain future.
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