Over the years, retail has undergone a transformation — boosted by the rise of e-commerce, a decline in visits to brick-and-mortar stores, the proliferation of digitally native brands and the adoption of new omnichannel technologies.
While some fashion titans solidified their place in the sector, other chains were pushed to the brink — and some eventually collapsed. Their struggles were compounded by the coronavirus pandemic, which forced dozens of boldface retailers to file for bankruptcy protection or undergo reorganization in an attempt to rescue their businesses. Amid an unprecedented year, FN recounts the top retail bankruptcies of 2020.
Arcadia Group
When: Nov. 30
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What happened: Based in the United Kingdom, the Topshop parent’s administration filing is expected to result in a ripple effect across its home country. On Dec. 1, a day after Arcadia went bankrupt, British department store chain Debenhams announced the permanent shutdown of its entire brick-and-mortar fleet across the U.K., where it operates 124 outposts as well as its online platform. Arcadia is the biggest concession operator in Debenhams: Its Burton, Dorothy Perkins, Miss Selfridge, Evans and Wallis labels altogether represent about 5% of the retailer’s sales.
Ascena Retail Group
When: July 23
What happened: This month, a judge green-lit the sale of its Ann Taylor, Loft, Lane Bryant and Lou & Grey labels to an affiliate of private equity firm Sycamore Partners, whose portfolio includes Belk, Hot Topic, Talbots, The Limited and Torrid. As part of the deal, Premium Apparel will acquire the brand assets for $540 million on a cash- and debt-free basis. It intends to retain a “substantial portion” of the retailer’s brick-and-mortar fleet.
Brooks Brothers
When: July 8
What happened: In the months leading up to its bankruptcy, the menswear retailer furloughed about 2,900 employees, reduced the salaries of its remaining workers and announced the shutdowns of three U.S.-based manufacturing facilities. Its Chapter 11 filing came amid an overwhelming shift to casual office attires. In early September, it completed its sale to Authentic Brands Group and SPARC Group — a venture created by the brand management firm and Simon Property Group. Together, ABG and SPARC also acquired Forever 21 and Lucky Brand this year.
Century 21
When: Sept. 10
What happened: Along with declaring bankruptcy, Century 21 filed motions to start going-out-of-business sales at its 13 stores across New York, New Jersey, Pennsylvania and Florida. The decision to seek Chapter 11 protection, said the company, came after its insurance providers failed to pay roughly $175 million under certain policies that were put in place to protect against losses stemming from business interruptions, such as those experienced as a result of the coronavirus pandemic. Its intellectual property assets — including its trademarks, the C21Stores.com domain name, customer data and social media platform — are currently up for sale.
JCPenney
When: May 15
What happened: JCPenney sought Chapter 11 protection after struggling for several years amid declining sales, numerous leadership changes, increased digital competition and, more recently, challenges induced by the pandemic. In its Chapter 11 filing, the department store announced that it would shutter 242 outposts, and it moved forward with the closures of 133 locations two months ago. A week into December, with the goal of exiting bankruptcy ahead of the holidays, JCPenney announced the completion of its sale to Simon Property Group and Brookfield Asset Management, as well as its debtor-in-possession and first lien lenders.
J.Crew
When: May 4
What happened: In early May, J.Crew became the first major American fashion retailer to go bankrupt as the COVID-19 outbreak spread across the U.S. Four months later, it completed its financial restructuring process and equitized more than $1.6 billion of secured debt. Anchorage Capital Group became its majority owner and — along with GSO Capital Partners LP and Davidson Kempner Capital Management LP — has provided the company with a $400 million term loan to support ongoing operations and future initiatives.
Lord + Taylor
When: Aug. 2
What happened: Following months of speculation, Lord + Taylor and owner Le Tote sought bankruptcy protection from creditors as it failed to turn around its business amid the global health crisis. In April, the U.S.’s oldest department store saw the bulk of its executive team resign, including president Ruth Hartman, and a source close to the company told FN that it was seriously considering liquidating its business. Less than a month after its Chapter 11 filing, the retailer revealed the permanent closure of its entire brick-and-mortar fleet of 38 outposts after a 194-year run.
Modell’s Sporting Goods
When: March 11
What happened: Just days before the pandemic forced the closures of nonessential retailers across the U.S., Modell’s Sporting Goods cited a challenging retail environment as its reason behind a Chapter 11 filing. The family-owned retailer had tried a number of tactics to stave off bankruptcy, including negotiations with landlords, which yielded some concessions and saved several of its stores that were previously on the chopping block. In mid-August, Retail Ecommerce Ventures — through the subsidiary Modell’s Sporting Goods Online Inc. — emerged as the winner to acquire the chain’s IP assets at an auction. (REV, led by CEO Alex Mehr and president Tai Lopez, is also looking to bring back Stein Mart, Radio Shack, Dressbarn and Pier 1.)
Neiman Marcus
When: May 7
What happened: The department store completed its restructuring process in mid-September, when it changed its name from Neiman Marcus Group Ltd. LLC to Neiman Marcus Holding Company Inc. With the full support of its creditors and new equity shareholders, it eliminated more than $4 billion of existing debt. The exit from bankruptcy came a day after a spokesperson confirmed to FN that it would lay off an unspecified number of employees as it reorganizes the “store associate structure” at its namesake chain and Bergdorf Goodman.
Tailored Brands
When: Aug. 2
What happened: The Houston-based business was particularly hard hit as the COVID-19 outbreak led to stay-at-home orders that reduced the demand for workwear, suits and formal fashion. Four months after filing for bankruptcy, Tailored Brands — parent to the Men’s Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore brands — implemented its reorganization plan. It managed to get rid of $686 million debt and secure exit financing to support its ongoing operations. However, it announced the permanent closures of dozens of stores across the country.
