Children’s restaurant and entertainment chain Chuck E. Cheese filed for bankruptcy this week, citing the damage wrought by extended store closings. One wonders if the protocols that will be in place for the foreseeable future–crowd limits, hand sanitizing–could preclude the chain from ever reopening successfully.
Struggling vitamin and nutrition retailer GNC announced a chapter 11 bankruptcy filing, with plans to close nearly 1200 of its 5800 retail locations. The company cited covid-19–related store closings as a main driver of the filing.
GNC did secure $130 million in financing to endure the pandemic and successfully emerge from the bankruptcy process.
AMC Theatres may not be able to survive the coronavirus shutdowns, the company revealed in its latest regulatory filing.
The company, the world’s largest movie theater chain, told the Securities and Exchange Commission that it had “substantial doubt” it could withstand the reopening process, despite securing credit lines and restructuring debt to help it endure the current landscape.
AMC acknowledged as causes the uncertainty around the timing of reopenings, the altered capacity quotas many locations will face, and the reconfigured calendar for new releases. With 40% of ticket sales typically going to customers over the age of 50, who may be slow to return to a crowded movie theater, the company needs to work toward an operating model that can keep its doors open.
One thing After Shopping hadn’t anticipated upon launch was the potential impact of looting on the retail landscape. An unfortunate side effect of recent protests is the ancillary result: groups of instigators and opportunists, seeing an outlet in the mayhem, trashing all manner of stores in all manner of neighborhoods.
An article in today’s New York Times sums it up well: amid the crowds and their waves of anger, some of those waves are cresting with shattered windows and emptied stores. The result is shopping corridors gutted of commerce, and storefronts likely to be shuttered for weeks or months, as shop owners grapple with replacing fixtures and merchandise, making essential repairs, and negotiating with insurers.
We will be looking for news on the fallout of these actions in the coming days and weeks, once the protests—and looting—calm down and retailers begin to take stock of the damage.
CNN summarized May’s bankruptcy filings by retailers and other consumer industry operators, including a few covered in this space as well as some new notes. Among them:
- Department store chains JC Penney and Neiman Marcus
- Discount home goods retailer Tuesday Morning
- and Gold’s Gym, which vows, “We are absolutely not going anywhere.”
As noted in the article, “A bankruptcy filing doesn’t necessarily mean a company will go out of business. Many use bankruptcy to shed debt and other liabilities while closing unprofitable operations, in hopes of emerging leaner and stronger. … Still, many other brands that have filed for bankruptcy with the intention of staying in business didn’t survive.”
One Axios commentator thinks the corporate bankruptcy wave has just gotten started, noting that many of the ones to date had pre-existing financial stressors prior to the lockdown period. More filings are likely to follow as the full impact of the virus on retail sales becomes more clear.