The 10 Biggest Retail Bankruptcies of 2020

retail store closing

More than three dozen retailers, including the nation’s oldest department store chain, filed for bankruptcy this year, marking an 11-year high.

Pre-pandemic, several of these retailers were already teetering on the brink of survival. But the Covid health crisis pummeled the industry. Lockdown orders put in place in March to slow the spread of the virus turned into prolonged store closures for many businesses that didn’t sell essential items like groceries. Retailers that started 2020 already in a tough spot were hit harder. Liquidity was strained and sales went into a freefall.

“The magnitude of bankruptcies has been larger this year compared to previous years,” said David Berliner, chief of BDO’s business restructuring and turnaround practice. “You’re noticing national brands and other prominent franchises, that had hundreds of stores, now being liquidated or going through a restructure to salvage what they can.”

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About 60% of the retailers that had filed for bankruptcy in 2020 through August listed more than $100 million in assets, compared with 50% of filings during the same period in 2019 and 36% in 2018, Berliner said.

Neiman Marcus, JCPenney, Ascena Retail Group and Tailored Brands have now joined the ranks of some of the all-time biggest retail bankruptcies on record — including Sears, Toys R Us and Circuit City.

The pandemic accelerated a number of industry trends, including rampant growth in digital commerce. Consumers habits shifted, and the items they wanted to buy changed abruptly. Sales of apparel fell sharply, as working from home and not getting dressed up became the norm. And instead, consumers looked to buy things to entertain themselves at home, like bikes and puzzles. This has largely benefitted companies such as Amazon, Walmart and Target, which have strong online businesses and sell a little bit of everything.

After the holiday season wraps, more turmoil is expected in the new year. The holidays are always a “make or break” time for retailers, but analysts say that’s especially true in 2020.

“The silver lining of all this, however, is that in an accelerated understanding of great weakness comes the ability to look at 2021 and our new normal when modeling for the future,” said Scott Stuart, CEO of the Turnaround Management Association.

“I believe the retail sector is in a time of soul-searching and reckoning, understanding that what was, is likely gone forever,” he added.

Below are the 10 biggest retail bankruptcies of 2020, listed by asset sizes and liabilities at the time of their filings. The list was compiled using data from court filings, S&P Global Market Intelligence and BDO… CNBC News

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