This site is prone to publish bankruptcy news, as any kind of corporate bankruptcy filing is likely to lead to store closings.
However, a chapter 11 bankruptcy is actually a financial tool to help save a company, in a more macroeconomic sense. Stores may close, jobs may be lost, but if a thousand-store business can emerge with 700 locations and a viable business, that’s far more preferable to the company simply closing its doors for good.
The back half of Rob Walker’s Marker piece on the Pier 1 bankruptcy explains this nicely, and is worth reading. (Side note: Rob Walker and Marker are both highly recommended parallel reading to After Shopping.) In short, chapter 11 means a company “seeks a court-supervised process giving it some form of relief — a way to start over.” For its part, Pier 1 filed for bankruptcy in January, ahead of the pandemic, a process that was undone when stores had to close this spring.
We will see more bankruptcies and liquidations in the coming months, but not all of them will be worst-case scenarios; like you, this author is hoping for triumphs and clever new ways of doing business as we move forward.
That’s the title of a heartfelt post on the Medium publication Zora, which made the rounds yesterday. The piece focuses on how working at, say, JC Penney is a road to women’s empowerment and economic opportunity.
In it, Marissa Evans posits that part-time retail jobs can be advantageous to parents who want to work and raise children on their own schedule (in much the same way that those same part-time jobs are good for students after school). The author also notes a social and emotional component to in-store jobs that warehouse and call-center gigs, poised to expand in the post-pandemic era, may not match.
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.
Women’s Wear Daily spoke with numerous industry experts on how retail is changing in the moment (WWD; full text). The lede notes that the coronavirus is “forcing retailers to make immediate adaptations for social distancing and sanitizing, while accelerating changes already in motion.”
Among the changes that have, or will soon, take root:
- hospitality-driven renovations—think spaciousness and service, with changes in how shoppers flow through a store
- boosting connectivity, from online pre-shopping to altering the lighting in a fitting room with a cell phone
- increased service options like curbside pickup and appointments
“Simpler” seems to be the prevailing theme, with the thought that sanitization will lead to fewer, smoother surfaces and more contactless experiences like automatic doors.
That’s the question atop this think piece in the New York Times, asking many of the questions your correspondent has been wondering, too.
Betteridge’s Law provides a handy answer to this, although the “new and unfamiliar sights” referenced in the column are the relevant focus. The authors discuss both the near-term changes and the questionable reception they will receive from shoppers, many of whom have not roamed stores for pleasure since March.