20 Once Iconic Companies You Didn’t Know Were At Risk Of Bankruptcy in 2020

In the topsy-turvy world of business, there can be dramatic and unexpected up-and-downs. In recent years retail chains, with the rise of online shopping platforms such as eBay and Amazon, have suffered challenging conditions. It was a real pity to see Sears filing for bankruptcy in 2018 and they’re not the only ones that have gone through some tough times.

Let’s take a look at a list of retail giants that have the potential to collapse in the near future. Trust me, some names on the list will surprise you!


1. J. Crew

Over the past few years, J. Crew has closed a number of stores. Even if it is favored by the former First Lady, Michelle Obama, its customers seem not to be flocking to its new designs. In 2017, sales fell by 5% compared to the year before and the company recorded a $125 million loss.

Due to its disappointing sales performance, they sacked their creative director, Jenna Lyons as well as their CEO, Millard “Mickey” Drexler. They also launched a new loyalty program and started to cooperate with Amazon to sell some of their cheaper merchandise online. We still do not know whether this will have the desired effect, but let’s hope for the best.


2. GNC

Although it’s doing well in China, GNC suffered a revenue decline of 3.4% in 2017 and carried $1.3 billion in debt. Last year, GNC was reported to have sold 40% of the company’s shares to Harbin Pharma, a Chinese pharma company who are set to become the company’s largest shareholder after the transaction is closed. Maybe GNC can look to China to solve their performance woes.

However, a big issue for GNC is its debt. It is reported that GNC has a $1.38 billion long term debt. While holding only $40 million in cash, they are going to have issues refinancing. GNC really needs to find a way to generate more cash, and quick!


3. Tops Markets

Tops Markets also has bank problems, with an estimated $265 million in loans. The huge debt resulted in the grocery retailer filing for bankruptcy in February 2018. Despite this, it plans to still operate its 169 supermarkets in New York, Pennsylvania and Vermont.

The problem here is that Tops Markets has failed to keep up with consumer trends. Nowadays, consumers tend to shop at non-traditional food retailers as they offer lower prices, as a result of this Tops Markets has lost a large market share to its competitors.


4. 99 Cents Only

This retail giant is famous for its discount goods. However, it has been facing competition from a great number of retailers, such as Dollar General, Dollar Tree and even Walmart. As a result, the company reported a net loss of $27.1 million in December 2017.

The Company has tried hard to work through the tough times. It was recently sold to Ares Management, Canada Pension Plan and a private family. It also appointed a new CEO, Jack Sinclair, who has a lot of management experience in Walmart. Now let’s hope the new owner and the new CEO can save the retail giant.


5. Ascena Retail

Ascena is the owner of a series of brands, such as Ann Taylor, Dress Barn, Loft and Lou & Grey. However, managing a number of brands doesn’t necessarily mean you will achieve a great profit. In 2017, the sales were only $1.7 billion. After years of underperforming, they decided to shut down 25% of their Dress Barn stores. In June 2017, they claimed that they would close 667 stores in total.

Ascena is also trying other retail methods to recover, notably through their online business. According to Moody’s, Ascena “is on a path to developing a strong ‘backbone’ of retail capabilities.”  Maybe Ascena will be the next enterprise that is saved by online shopping.


6. Fred’s Pharmacy

Last May, Fred’s Pharmacy claimed that its top-line sales for the past fiscal year had declined by 4.3% and they recorded a net loss of $139.3 million. Their plan to open 400 more stores did not work well as well as hoped, and it resulted in higher costs and expenses that they struggled to contain.

To get through the tough times, Fred’s Pharmacy is selling some of their business. The specialty pharmacy was sold to CVS, another member on our list for $40 million. In addition, almost half of their stores were sold to Walgreens. The risk of bankruptcy did ease, but the Company still has a long way to go for a full recovery.


7. Destination Maternity

In the maternity apparel industry, Destination Maternity is definitely one of the market leaders with more than 1,000 stores. However, its CEO left in 2018 after its top-line sales for the year declined by over 7%. After the two unsuccessful interim CEOs, the company finally decided to recruit a professional adviser to help the company.

One of the main reasons for the poor performance was a relationship break with Kohl's in 2017. However, the company is taking steps to improve their online performance and achieved a 40% percent increase in its e-commerce sales. As a result, Destination Maternity is one of the “safest” giants on our list.


8. Cole Haan

Cole Haan is famous for its luxury footwear product line. However, the Chicago-based brand was still considered as one of the retailers at risk in 2018 by USA News. Nike used to be the owner of Cole Hann but then they sold it to Apax Partners in 2013 due to unsatisfactory sales performance.

Things are getting a bit better for Cole Haan recently though. According to their recent debt offering, in 2018 the sales volumes increased by almost 8%. This is said to be primarily because of their e-commerce sales. Since being sold to Apax Partners, they closed a lot of their brick and mortar stores. Nowadays, nearly one-third of their North American sales were completed through e-commerce platforms.


9. Bebe

In 2007, Bebe’s creative director Neda Mashouf left after divorcing her husband Manny Mashouf, who was the founder of Bebe. Manny could hardly believe it at the time but the brand lost popularity after 18 years of successful operations. In 2017, it recorded a $4.6 million operating loss.

Of late, Bebe has decided to finally get away from the traditional retail model and have followed a strict online only policy. Online shopping incurs less overhead and operating cost. Maybe that is the reason why people are still confident of Bebe’s future.


10. Stein Mart

Like 99 Cents, Stein Mart is another discount department store that has struggled for years. In 2017, it suffered a net loss of $23.4 million. However, Stein Mart did not lose hope as its online sales increased by 47% in the third quarter in 2017, which helped them to offset the loss by 10%.

This year, Sterin Mark has announced that advisers have been appointed to help them turn their fortunes around. It was also announced last year that they had entered into deals with two big lenders to extend their borrowings by at least three years. So, you needn’t worry about losing all of our discount good stores. At least not yet!


11. JC Penney

In recent years JC Penney had been seriously underperforming. In 2017, top-line sales dropped and net income was only $116 million. As a result, It laid off 1,000 employees and closed one distribution center in 2018.

One of the major factors that caused its struggle is its $4.2 billion total debt. In 2018, its CEO as well as its chairman, Marvin Ellison left his positions. After appointing Jill Soltau as the new CEO, JC Penney announced that the company had earned $16.7 million during the first three months with their new CEO.


12. Office Depot

Office Depot might be your top “place-to-go” if you want to buy some office supplies. However, the retailer struggled in 2017 with an annual sales decrease of 7%. The total sales volume in 2017 was only $10.2 billion.

Trying to recover from the hard times, its CEO Gerry Smith hoped that Office Depot would offer more services. One such example, was that they launched “BizBox”, a subscription to offer more services for start-up businesses. This is much more attractive to customers, as you can easily buy office supplies online, but you can’t easily receive services online. Recent stats show that services, including BizBox, attributed to more than 14% of their total sales.


13. Vitamin Shoppe

Like GNC, Vitamin Shoppe has not done well in recent years. In 2017, the top-line fell 8.5% to $1.2 billion. The struggle was primarily due to it losing popularity with consumers.

After that, they focused on strengthening their e-commerce business. They also offered a subscription service to try and survive in the highly fragmented supplement store market. Nowadays, they are also trying hard to turn things around through expansion, events, delivery services and more.


14. Neiman Marcus

Neiman Marcus is one of the most famous luxury clothing retailers. However, In 2017, Neiman Marcus recorded a sales decrease of 5% to $4.7 billion. It seems that their interest expenses were the primary cause of their poor performance. Reports also claimed that they were cutting more than 200 jobs.

Hudson’s Bay could have saved them by buying the luxury retailer. However, the acquisition did not work out because even Hudson’s Bay was worried about Neiman Marcus’s flagging sales. Neiman Marcus are now are investing in online shopping and digital technology, however, if things don't work out, it is likely that they will have to file for bankruptcy.


15. Bon-Ton

In 2018, Bon-Ton filed for bankruptcy and was sold and liquidated. With its 100 years of operations, the company was $1 billion in debt before filing for bankruptcy. The company lost a large market share to Amazon as most of their stores were located in smaller towns with little competition, but these places can be accessed by Amazon just as easily.

To save the brand name, the Company will relaunch its e-commerce site and will open select stores. They are also looking at opportunities to sell part of their brick and mortar business.


16. Pier 1 imports

In the first quarter of 2018, net sales of Pier 1 fell by 9.2% to $371.9 million, compared with the same period in 2017. As a result, its credit rating was downgraded. In addition to its poor performance, the tariff war between the US and China has contributed to its struggle. According to their public release, 60% of Pier 1 goods are made in China.

Finally, though, good news has started to emerge regarding the US China’s trade war. Pier 1 has scope to improve their performance in 2019, but they still have to find new ways and strategies in order to achieve long-term success.


17. Guitar Center

As of the end of 2018, Guitar Center had a debt of more than $900 million. Nowadays people are buying fewer and fewer guitars (e.g. electric guitar sales decreased by 36% from 2005 to 2016), the company has struggled after its 50 years’ successful operation.

The company is trying to do arrange an emergency loan to save it from the crisis. After that, according to Michael Amkreutz, Vice President in charge of merchandising and e-commerce, the company will undergo a period of transition to improve its performance.


18. Lands’ End

Lands’ End was once in association with Sears, but now the two retail giants have both collapsed. At Lands’ End, you can choose from casual clothing, luggage and home furnishings. One of the main reasons for Lands’ End’s failure was Federica Marchionni, its former CEO’s poor decisions. He decided that the company should aim at fashioned-forward consumers. However, it never got its core customers to believe that they can offer high fashion products.

Things are getting better. According to the latest quarterly report, same store sales increased by 9.1% compared with the same period in 2018. The company’s shift to e-commerce sales has also improved the company’s performance.


19. Nine West

The shoe retailer has $1.5 billion in debt and is currently in negotiations to restructure its debt. They are considering whether to file Chapter 11 bankruptcy and even sell some part of the company. The Easy Spirit Brand has already been sold. Nowadays, Nine West only has 25 stores and all of the rest have been closed.

It is reported that in the future, the company will switch its focus from shoes to jewelry and its clothing lines, as customers no longer have a huge demand for ballet flats, sandals and heels. Let’s hope this move can save this famous brand.


20. David’s Bridal

Nowadays, more and more brides choose to have casual and less expensive affairs, with all the market players in the wedding industry experiencing drops in sales, especially so for David’s Bridal. It is reported that the Company has more than $750 million of debt due for refinancing in the next two years. What’s worse, its credit rating was downgraded in June 2018 by S&P Global. In 2018, sales, earnings and profit margins all fell, compared with 2017.

The company is changing its sales strategy. For example, some wedding dresses are now sold online at a mere $99. It also bought an online gift registry service Bluepoint, all thanks to their new CEO Scott Key.


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