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Item Description – The effects of COVID-19 are everywhere. People monitor reported cases and deaths as well as another aspect of the pandemic: bankruptcies. Our society is structured in a way that requires us to rely on businesses for goods and services in exchange for cash. When the cash flow slows or stops, everyone notices. The shutdown has generated a powerful ripple effect that everyone must ride out or fail – including some of the country’s biggest brands.While the likes of RadioShack and Blockbuster have faded into the pages of business history, others now face the possibility of a similar demise. Offshore drilling companies Whiting Petroleum and Diamond Offshore filed for bankruptcy last month. J. Crew was the first major retailer in the United States to do the same on May 4th.Pier 1 Imports, one of the most prominent home décor sellers in the country, announced it would be closing down after no buyers were found to take over the chain. The company asked the bankruptcy court for a complete liquidation.Pier 1 CEO and CFO Robert Riesbeck stated that “Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down.”While it sounds like a lot of doom and gloom in the retail industry right now, others are seeing potentially lucrative opportunities opening up in the spaces left behind.$10 Billion in Post-Coronavirus Bankruptcy Sales is Up for GrabsMacy’s Chief Executive Jeff Gennette sees these sweeping failures as opportunities for those who can survive or rebuild later.“You see certain brands today that are either going to Chapter 13 or Chapter 11,” he explained. “Well we’ll look at that very carefully depending on the brand… and with the location.”According to Gennette, there is approximately “$10 billion worth of opportunity that’s up for grabs right now” based on the competitive climate.While he wouldn’t give specifics, Gennette alluded to his company paying attention to which businesses are distressed and may leave behind customers who will be searching for the products those missing retailers once provided.Gennette stated that Macy’s may add new categories to its stores based on those unfulfilled consumer needs.Bon-Ton filed bankruptcy and liquidated its assets in 2018. Tiger Capital Group and Great American Group won the auction, which held an estimated worth of over $775 million.Macy’s paid attention and took advantage of Bon-Ton’s loss by aggressively marketing to its former shoppers and employees. Closing the chain’s 200 locations opened opportunities for growth for retails who were ready to dive in.Life and Death in the Retail IndustryRetail has always been a highly competitive world. Stores come and go, however, right now there appears to be far more going. It’s not easy to remain afloat when people can’t leave their homes to shop. Meanwhile, others have lost jobs and have to pinch pennies to feed their families.Nothing lasts forever. Already, many regions are opening again. Non-essential businesses have the option of opening their doors or will very soon. Others have tried to expand other options, like adding online shopping and curb side pickup services.Some are likely beyond saving right now. Stage Stores, Neiman Marcus, and J.C. Penney have filed for bankruptcy. Stage Stores is on the brink of liquidation if a buyer isn’t found. J.C. Penney plans to shutter 30% of its locations, or about 240 stores total, as a step in its restructuring plan. Nordstrom will be permanently closing 16 stores.Despite Gennette’s positive-sounding comments, Macy’s is also experiencing losses. The company expects to operate at a loss of $905 million to $1.11 billion. Last year, Macy’s had a net income of $203 million. First-quarter sales are estimated to total between $3 and $3.03 billion after last year’s $5.5 billion.Store shutdowns could be on the horizon for Macy’s after COVID-19. The company announced that it may have to close 125 stores over the next three years. Their stock was up 1% as of today but had fallen approximately 70% over the past 12 months, with a market value of around $1.6 billion.Everyone is feeling the pressure to find ways to make it until the world can fully rebound after the coronavirus outbreak. Some have it much harder than others, but everyone is feeling the financial losses.The U.S. Chamber of Commerce released a report that found that 43% of small businesses believe that they will not survive six months of the shutdown’s economic conditions. At the time of the April 3rd, 2020 posting, one in four, or 24%, of small businesses had already temporarily shut down with 40% reporting plans to do so in the following two weeks.Small businesses that participated also rated the U.S. economy as “poor.” Around 46% believed that it will take six months to one year for the country’s economy to return to normal.While we will likely continue to see more bankruptcy filings in the coming months, it’s hard to tell exactly where the losses will end when all is said and done. For now, many retailers must limp along in hopes that they can eventually take a slice of the $10 billion pie left behind by competitors.

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