6 companies that filed for bankruptcy in May

6 companies that filed for bankruptcy in May

Retailers are already struggling, and now they are suffering The impact of coronavirus bears the brunt. However, large fitness brands and large car rental companies have recently filed for bankruptcy.

Applying for bankruptcy does not necessarily mean that a company will go bankrupt. Many people want to reduce debt and other liabilities through bankruptcy, while closing unprofitable businesses with a view to becoming more streamlined and stronger. Many of these companies have achieved record profits, including automakers General Motors (General Motors)And many American airlines.

However, many other brands that filed for bankruptcy are still not immune. Here are some American companies submitted in May:

Gold’s Gym said on May 5 It turns out that the virus has affected it “far-reachingly” in many ways, including temporarily closing many of its 700 global stadiums.

The statement went on to say that applying for Chapter 11 bankruptcy protection will help it “become stronger and ready to grow”.

The 55-year-old company intends to withdraw from bankruptcy protection in August and said that it “will never go anywhere.” Gold did close 30 locations in April, but it had no intention of permanently closing any gyms.

hertz

Car rental giant hertz (HTZ) Application Bankruptcy on May 22. The company also rents cars under the Dollar, Thrifty and Firefly brands.

The company has been in business since its establishment in 1918, when it opened factories with more than a dozen Ford Model Ts. Hertz survived the Great Depression, the almost complete cessation of World War II car production in the United States, and numerous oil price shocks.

By declaring bankruptcy, the rental car company said it intends to continue operations while restructuring its debt to make its financial health healthier.

The company said in a statement: “The impact of Covid-19 on travel demand is sudden and dramatic, leading to a sharp decline in the company’s revenue and future bookings.” The automotive market will be completely reopened for sale, so today’s action. “

Herzin Pay millions of dollars in bonuses Before its bankruptcy-and a month after it began to lay off thousands of employees, thank the executives.

According to a document from the US Securities and Exchange Commission (SEC), the company paid a total of $ 16.2 million to 340 executives on May 19 as part of the company’s plan to leave them in place when it tried to restructure.

JCPenney

Coronavirus may be the last blow of the 118-year-old department store JCPenney. It is already struggling to overcome ten years of wrong decisions, executives’ unstable and destructive market trends.

JCPenney (JCP) File for bankruptcy The company reached an agreement with most lenders on May 15 to allow it to try a turnaround plan to maintain business.
But it will close 30% of its 846 US stores, about 200. The company did not disclose how many of its 85,000 employees would be unemployed due to the permanent closure of the store.

CEO Jill Soltau said in a statement: “Before this pandemic hit, we made significant progress in rebuilding the company.” He added that the company’s efforts “have begun Get rewarded. “

But JCPenney ’s problems can be traced back to before the pandemic, because the company suffered Ten years of wrong decisions. Its most recent profitable year was 2010, and its net losses since then have totaled $ 4.5 billion.
As more and more consumers shop online, the entire department store department suffers. Large discount stores, for example Walmart (WMT), aims (TGT) with Costco (cost) Facts also prove that this is competition, which can provide shoppers with lower prices and provide some goods, such as groceries, that are not found in department stores.

J. Crew Group

This is the difference that no one wants: J. Crew Group becomes America’s first national retailer The corona virus pandemic forced stores to close, so they filed for bankruptcy protection. It was submitted on May 4.

The company owns the old-school J. Crew and Madewell brands and hopes to continue its business and stand out from bankruptcy to become a profitable company. The fast-growing denim brand Madewell, which is about to conduct an initial public offering (IPO), will remain part of the company’s business.

Since the acquisition of J.Crew Group from private equity firms TPG Capital and Leonard Green & Partners for $ 3 billion in 2011, its debt burden has been heavy.

In the nine years since the transaction was completed, it has grown rapidly, and the number of stores has almost doubled. But it also accumulated more debt. Before announcing the transaction, it had $ 50 million in long-term debt in 2010, and by February this year, that number had surged to $ 1.7 billion.

The company operates nearly 500 stores, including J. Crew’s factory outlet store.

Neiman Marcus

Luxury retailer Neiman Marcus Filed for bankruptcy on May 7The company said that the restructuring agreement with creditors will enable it to “substantially reduce debt and lay the foundation for the company’s long-term development.”

The company’s history can be traced back to 113 years, when its first store in Dallas was still the location of its headquarters. The company also operates the Bergdorf Goodman and Last Call chain stores.

Neiman As of last year, there were 69 stores in these three brands. In March before the pandemic caused the closure of a large store, the company announced plans to permanently close a large store. The “majority” of its 22 Last Call outlet stores.

The fate of ITS is likely to be sealed in 2013, when Ares Management and the Canada Pension Plan Investment Committee paid $ 6 billion in the form of a leveraged buyout to privatize the company.

“The biggest problem in Neiman is [private equity companies] Too much paid, too much debt burden.

Tuesday morning

Discount household goods retailer Tuesday morning (on Tuesday) Blame this virus on the long-term closure of stores “Insurmountable financial obstacles.”

CEO Steve Becker (Steve Becker) said that before the pandemic, the company’s business was booming. However, the resulting temporary store closures and employee vacations have caused “serious consequences” for our business.

In a statement, he said: “Store operations were completely suspended for two months, which put the company in a financial position, and only through Chapter 11 reorganization can the problem be effectively resolved.

The Dallas-based chain filed an application on May 27, saying it would permanently close about 230 of its nearly 700 US stores.

-Chris Isidore and Nathaniel Meyersohn of CNN Business contributed to this report.

Leave a Reply

Your email address will not be published. Required fields are marked *