Stores Filing For Bankruptcy Due To COVID-19 & Which Ones Found A Way To Survive & How
Usually bustling with activity, New York City retail stores have relied on a constant flow of customers to keep them afloat from the beginning. But with the spread of COVID-19 preventing any customers from walking through the doors of in-person stores for the majority of 2020, retail stores have been hit as hard as the rest of us. From local loyals to one-time tourists, retail stores around the globe are struggling through this customer-less pandemic; many of them have been forced to file for bankruptcy and close storefronts for good.
Large department stores and small designer boutiques alike have shut their doors with only the options of moving to e-commerce or closing completely. Even with recent re-openings in some cities, places like New York require stores to limit the number of customers and change rules and regulations to account for social distancing and safe shopping- which makes the shopping experience less convenient and quite scary for many would-be shoppers.
The COVID pandemic has hurt many, but here are some retail locations that have not been able to (and might not ever) bounce back from the months of lockdown:
1. Diane Von Furstenberg
Known for her knitted jersey wrap dress, the Belgian designer has made waves in fashion since she first stepped foot on a NYFW Runway in the 1970s. Since then she remained a strong figure in the fashion world and opened over 30 stores around the world. After starting a publishing house among other creative ventures, she relaunched her clothing brand DVF in 1997. Over the last couple of years DVF cut back from 32 to now 19 stores. Within the last year and struggles with the COVID pandemic, 18 of her 19 remaining stores have closed and more than 75% of her staff was let go. The only store left is DVF’s flagship store and headquarters in NYC’s Meatpacking District, located in a building she owns. DVF has begun shifting to almost solely e-commerce in the US and Europe, while wholesaling in China.
2. Neiman Marcus
The chain of luxury department stores was founded in 1907 and currently operates through both Neiman Marcus and Bergdorf Goodman stores. The company and 23 affiliated debtors filed for Chapter 11 bankruptcy in May. The financial problems faced by the company had been growing for a few years, but the bankrupt state was a direct result of COVID-19. In July, the company announced the removal of its five-floor outpost at Hudson Yards (which only opened in 2019), among multiple other shutdowns as part of their downsizing effort. Other store closures include locations in Bellevue, Washington; Palm Beach, Florida; and Fort Lauderdale, Florida.
3. JCPenny
Founder James Cash Penney opened his first store in 1902 through a partnership with other dry-goods store owners. In 1914, the brand now encompassing 34 stores moved its headquarters to New York City. By 1917, the company operated through 175 stores throughout the US. With yearly growth and expansion, J.C. Penney was a successful retailer for decades. However, in the 2000s, the brand began shrinking its reach; in 2015, 39 under-performing stores were closed and over 2,000 employees were laid off. By January 2020, the company was still cutting back, and in May the company filed for bankruptcy protection, announcing 242 of its stores would close due to the COVID pandemic. The company has decided to close its two, major New York locations. The store in Manhattan Mall closed for COVID lockdowns and will not reopen with the rest of the city. The store in Kings Plaza, Brooklyn, NY, closed during the lockdown as well, but reopened afterwards. However, this store will permanently close on Sept 27, 2020.
4. Modell’s Sporting Goods
The sporting goods company was founded in 1889 in New York City, where it is also headquartered. What was once a single, family-owned store in Manhattan turned into a much larger entity. Starting in the 1950s, the family originally sold a “full-line” of discounted retail but decided to shift its specialty to sporting goods in 1989 when the larger market became challenging to manage. The brand reached 152 operating stores total, but the COVID pandemic has caused this number to drop significantly. The brand filed for bankruptcy protection in March, and with failure to save the business via negotiations (with landlords, etc.), the company began to completely close. More than 100 of its 152 locations were shuttered, seven of which in Manhattan, nine in Brooklyn, five in Queens, three in the Bronx, and two on Staten Island. The company’s Instagram shows countless posts of discounts and sales due to its going out of business.
5. J. Crew
As of 2016, J. Crew operates more than 450 retail stores across the United States. The brand was founded in 1947 under the name of Popular Merchandise, Inc, and renamed in 1983 as J. Crew. In 1989, the first retail J. Crew store opened in downtown Manhattan; New York City is also where the company is headquartered. On May 4, the company filed for bankruptcy due to financial issues caused by the coronavirus pandemic, as it also planned to close multiple store locations. In August, the company stated it had received concessions from landlords in the form of waivers and rent deferrals. The company has now reopened with 450 company affiliated stores (over 90% of its total) and plans to be out of bankruptcy sometime in September.
6. Gap Inc.
The American Icon, Gap opened 51 years ago and has never seen a quarter this bad, producing a $932 million loss. Sales for the quarter (ending on May 2) dropped 43%. Online sales, however, increased. Online sales and other company cash-saving measures have allowed the brand to stay afloat. During the pandemic shutdown, 90% of Gap stores closed, many of which stopped paying rent for their various locations. Many of their stores planned to close this year before the pandemic hit, including the storefront on 34th Street and Broadway in NYC, due to financial issues with the Gap and Banana Republic brands.
7. Victoria’s Secret
Victoria’s Secret, founded in 1977, is owned by L brands, but is being sold to a private equity firm, Sycamore Partners. Sycamore Partners will own 55% of the company’s stake. V.S. has been struggling for years, much of which is due to the brand’s inadaptability with customers’ wanting for inclusivity in messaging, advertisements, and products. In May 2020, L Brands said 250 VS and PINK stores will close permanently due to the pandemic. The VS flagship store in Manhattan’s Herald Square has been closed since the lockdown began. Without profits from constant customers in the busy area, L Brands Inc. sued its Herald Square landlord arguing that the pandemic has prevented the brand from being able to pay the $937,734 per month rent (according to footwear news). The brand will close about 250 US and Canada locations, it is unclear whether this flagship store will reopen to in-person shopping or its rent will be paid.
8. Jeffrey
Founder Jeffrey Kalinsky once owned three stores in Atlanta, New York, and Palo Alto. After 30 years of operation at the Atlanta store location, and 20 years after the opening of his NYC boutique, all locations have closed due to issues arising from the COVID pandemic. Nordstrom bought the brand from Kalinsky in 2005, and he worked closely with Nordstrom as a creative for the brand, assuming the position of ‘executive vice president of designer merchandising and designer fashion director’ when his brand was bought. He will retire from Nordstrom with his store closures.
9. Lucky Brand
Lucky Brand, which has been around since 1990, sells denim and other apparel items. The brand has 150 company-owned stores across the US, Puerto Rico, Canada, and Europe, along with Lucky apparel items being sold in various department stores. The retailer says it plans to close 13 stores completely, but, after filing for Covid-related bankruptcy on July 3, notes that more shutdowns could occur. The chief restructuring officer of the brand says there are plans to sell the company to SPARC Group or another retail operator (depending on bids) this month in order to keep up the operations of the store network.
10.Muji USA
The greater Muji brand was founded in 1980 as an “antithesis of consumer society”. As a subsidiary of the Japanese-based conglomerate operating in the form of retail stores, campsites, cafes, hotels, model house builders and more, Muji USA was created in 2006. Minimalism, affordability, and a variety of products sold once brought long lines to the SoHo store along with many other locations around the US. By 2020, the brand had expanded to over 20 stores across the country. This overexpansion hurt the company before the pandemic hit, but Covid prevented the brand from being able to dig its way out, causing all company stores to close. The company officially filed for bankruptcy on July 10, 2020 due to financial problems related to the pandemic.
11. Opening Ceremony
The brand opened 18 years ago in lower Manhattan, as a retailer for countless up-and-coming and big-name designers. Due to the changing ways people are shopping in accordance with the Covid pandemic and other social advances, the brand will close all of its stores in 2020. The company will continue to exist as a brand, but no longer a retailer. Their lines will be shifted to the e-commerce format for the future.
12.Frye
The shoe and accessory company announced early August that it will close all 16 stores. The Soho storefront closed during the Covid-19 shutdown earlier this year and has remained closed amidst city re-openings. The brand has decided to move completely to e-commerce instead of maintaining in-person shopping locations.
13.Lord & Taylor
Lord & Taylor is America’s oldest department store, founded in 1826 in New York City. In 1914, the Lord & Taylor Building opened on 5th Avenue to serve as the company’s headquarters. The company has been owned by several parent companies since its creation, currently owned by Le Tote. In 2018, it was announced that up to 10 of its stores would close, including the New York 5th Avenue location. On August 2, 2020, several stores were already being liquidated due to a bankruptcy filing related to the pandemic.
Despite the trying times of this pandemic, some retail stores have figured out a way to keep moving forward.
Retail stores staying afloat:
14.Kate Spade
Kate Spade, owned by Tapestry Inc., has changed some of its policies to abide by Covid rules and regulations. Curbside pickup is now available at 300 locations, and locations are slowly reopening (abiding by rules of limited hours and the number of occupants). New York stores, however, were slow to open. The Rockefeller location is open for “safe shopping and curbside pickup”, but a call to the store beforehand is suggested in order to understand the store’s protocol and whether it is a good time to visit. Appointments are available to those who want to schedule a one-on-one shopping session. Virtual appointments are also available where you can meet a store rep one-on-one online. The most innovative of its measures is the ability to “plan a virtual shopping party for you and your friends”, where the Kate Spade team will “play the hostess” for the event. Other NYC Kate Spade locations are not open for general, in-person visits, but the virtual options are still available.
15. Bergdorf Goodman
Bergdorf has stayed afloat despite Neiman Marcus’ shutdown. It might be Bergdorf’s reputation as the Neiman Marcus’ Group crown jewel or its adaptability to pandemic-related change, but Bergdorfs does not seem to be going anywhere. Social Media has played a large part in Bergdorf’s success by featuring live videos of Rihanna’s Fenty launch and other clips of what designers are doing at home. Its in-store, appointment-based shopping is another way they are moving through the pandemic. Appointments, including “private shopping” areas, “pre-selected [items]”, and “beverages served upon request”, are just some of the ways Bergdorf Goodman is turning this time into an opportunity for another luxury experience. Virtual Appointments with a personal shopper are also available to customers.
Article by Alexandra York, Contributor, PhotoBook Magazine
