With several brands and department stores to its credit including Palais Royal and Gordmans Stage, Stores has become the third major retailer in the United States after J. Crew and Neiman Marcus to file for bankruptcy on Sunday, May 10, 2020. The company has announced that it will seek a buyer for its hundreds of stores in 42 states.
The bankruptcy chain is just beginning, and the third big retailer in US files for bankruptcy.
This shows once again that the COVID-19 pandemic has had a negative impact on the market, including the retail market. In the absence of funding, the Director-General of Stages stores Michael Glazer admits that the company cannot continue under these conditions and that no other alternative was presented since the company was already suffering from debt problems and its market decline. Following this declaration, the company’s share price lost 22% of its value, thus showing a 95% depreciation during 2020.
263,000 stores have lowered their curtain But how many of them will reopen after the lockdown end?
Predictions show that other companies will follow. Thus, the Coronavirus will have caused a hemorrhage in the area. Several reports indicated, in fact, last recent weeks that all sectors will be affected by the lockdown and more specifically retailers. Car dealerships, like other retailers, are among the most affected, as is the restaurant sector.
If 263,000 stores have lowered their curtain because of the coronavirus, analysts fear how many of them will be able to resist and reopen after the end of lockdown. Indeed, according to UBS data, around 50% of these stores will cease to exist within the next five years.
The misfortune of some makes the happiness of others
Like everywhere in the world, confinement has pushed consumers to rush more and more towards online shopping knowing that the majority of retailers have felt the evil coming with the growth of online stores in recent years.
50% of RETAIL stores will cease to exist within the next five years.
COVID19 has done nothing more than bringing the blow of sledgehammer to largely over-indebted and fragile societies. With debts of around $ 1 billion and very modest revenues, a company like Stage wouldn’t have any other choice than filing bankruptcy.
But actually the question is: when and where the pandemic impact will stop?
